Factors of Economic Inequality
Several global and national factors can contribute to economic inequality:
Global factors influencing economic inequality include technological progress, globalization, and recession. For example, technological advancement has caused skill mismatch, limiting earning opportunities. Again some unexpected global incidents may lead to economic inequality. The recent Covid-19 pandemic caused massive job loss and pay cuts in most organizations worldwide. It has led to major income reduction, especially for the salaried class, which caused economic inequality.
National or country-specific factors are related to a country’s economic development and stability and government policies, including fiscal policies, liberalization, and regulation of labour and product markets. Global inequality has been under control over the last few years, but domestic inequalities have increased recently, especially in advanced economies.
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