CandleFocus Glossary Editor
Income inequality is an important economic concept which refers to the gap between different individuals or groups as measured by their income, wealth, or other financial assets. Inequality of income can take many forms, such as individuals within a given population having different relative incomes, or the same individuals having different incomes over time. These differences in income can be measured in terms of the Gini Index, developed by Italian statistician Corrado Gini in 1912, which measures the gap between the richest and poorest members of a population in terms of income (or capital) accumulation.
Income inequality has been a topic of debate among many in recent years, and its effects are felt around the globe. The disparate distribution of wealth and income among different population segments can lead to issues including poverty, inequality of opportunity, and social instability. Income inequality can also contribute to political and economic instability around the world, as it can be seen as a sign of unfairness or a lack of economic mobility.
The internet, modern data analysis techniques, and open source data have enabled economists, policy makers, and academics to more closely monitor and analyze income inequality. The Global Top Incomes Database, for example, is an open source project which gathers the latest information on top income distribution from income tax records around the world. It allows researchers to compare the incomes of various population segments, such as the wealthiest 1% or the not-so-wealthy 10%.
Other popular sources of income inequality data include the World Bank, the OECD (Organisation for Economic Co-operation and Development), and the World Wealth and Income Database. Each of these sources offers detailed studies and case studies on income disparities and the effects of income inequality on different societies. Through these reviews, policy makers, researchers, and activists are able to identify both successes and failures in terms of income equality efforts and make policy recommendations accordingly.
In addition to the Gini Index, researchers use a variety of other metrics to compare income inequality, including the Herfindahl-Hirschman Index and the Theil Index. All of these metrics are useful in helping economists, policy makers, and activists to understand the issue of income inequality and the effects it has on different societies. By identifying areas of success and failure in terms of income equality efforts, these metrics can help those studying inequality to better understand how to reduce and eventually eliminate the problem.
Income inequality has been a topic of debate among many in recent years, and its effects are felt around the globe. The disparate distribution of wealth and income among different population segments can lead to issues including poverty, inequality of opportunity, and social instability. Income inequality can also contribute to political and economic instability around the world, as it can be seen as a sign of unfairness or a lack of economic mobility.
The internet, modern data analysis techniques, and open source data have enabled economists, policy makers, and academics to more closely monitor and analyze income inequality. The Global Top Incomes Database, for example, is an open source project which gathers the latest information on top income distribution from income tax records around the world. It allows researchers to compare the incomes of various population segments, such as the wealthiest 1% or the not-so-wealthy 10%.
Other popular sources of income inequality data include the World Bank, the OECD (Organisation for Economic Co-operation and Development), and the World Wealth and Income Database. Each of these sources offers detailed studies and case studies on income disparities and the effects of income inequality on different societies. Through these reviews, policy makers, researchers, and activists are able to identify both successes and failures in terms of income equality efforts and make policy recommendations accordingly.
In addition to the Gini Index, researchers use a variety of other metrics to compare income inequality, including the Herfindahl-Hirschman Index and the Theil Index. All of these metrics are useful in helping economists, policy makers, and activists to understand the issue of income inequality and the effects it has on different societies. By identifying areas of success and failure in terms of income equality efforts, these metrics can help those studying inequality to better understand how to reduce and eventually eliminate the problem.