Causes of Economic Inequality
The following are the causes of economic inequality:
- Inequitable access to decent education may increase economic inequality by limiting prospects for social mobility and higher-paying occupations.
- Wage and salary differences caused by criteria such as skill level, education, and employment play a major part in economic inequality.
- Inherited wealth, asset ownership (such as property and stocks), and intergenerational transfers all contribute to the maintenance of economic inequities across generations.
- Globalization, technological developments, and shifts in labor demand can result in job displacement, pay stagnation, and rising income inequalities between skilled and unskilled workers.
- Tax systems and social welfare programs can either reduce or increase economic inequality by spreading wealth and establishing social safety nets.
- Systemic discrimination based on factors such as race, gender, ethnicity, and religion can contribute to unequal opportunities in employment, education, and access to resources.
- The concentration of market power among a few major businesses or individuals can lead to economic errors, less competition, and rising wealth inequality.
- Economic globalization, trade policies, and financial deregulation can all affect income distribution within countries, with some gaining more than others from worldwide economic integration.
Economic Inequality
Economic inequality is the unequal distribution of income and wealth between different groups in society. It is a concern in almost all countries around the world. Economic inequality can be measured in several ways, but the most common is to compare the incomes of the richest and poorest people in a society. For example, the Gini coefficient is a measure of income inequality that ranges from 0 to 1, with 0 representing perfect equality and 1 representing perfect inequality. In the United States, the Gini coefficient is currently around 0.4, which means that there is a significant amount of income inequality in the country.
Table of Content
- What is Economic Inequality?
- Causes of Economic Inequality
- Economic Inequality Examples
- Economic Inequality in India
- Factors of Economic Inequality
- Impacts of Economic Inequality
- Means to Address Inequality
- Challenges in Reducing Inequality
- Government Initiatives to Face Challenges
- Important Data on Economic Inequality
- Way Forward