Economic inequality
Differences in national income equality
around the world as measured by the nation-
al Gini coefficient. The Gini coefficient is a
number between 0 and 1, where 0 corres-
ponds with perfect equality (where everyone
has the same income) and 1 corresponds with
perfect inequality (where one person has all
the income, and everyone else has zero
income).
Slums next to high-rise commercial buildings
in Cochin, India.
Economic inequality comprises all disparit-
ies in the distribution of economic assets and
income. The term typically refers to inequal-
ity among individuals and groups within a so-
ciety, but can also refer to inequality among
countries. Economic
Inequality generally
refers to equality of outcome, and is related
to the idea of equality of opportunity. It is a
contested issue whether economic inequality
is a positive or negative phenomenon, both
on utilitarian and moral grounds.
Economic inequality has existed in a wide
range of societies and historical periods; its
nature, cause and importance are open to
broad debate. A country’s economic structure
or
system (for example,
capitalism or
socialism), ongoing or past wars, and differ-
ences in individuals’ abilities to create wealth
are all involved in the creation of economic
inequality.
There are various Numerical indexes for
measuring economic inequality. Inequality is
most often measured using the Gini coeffi-
cient, but there are also many other methods.
Causes of inequality
There are many reasons for economic in-
equality within societies. These causes are
often inter-related, non-linear, and complex.
Acknowledged factors that impact economic
inequality include the labor, innate ability,
education, race, gender, culture, wealth con-
densation, development patterns and person-
al preference for work, leisure and risk.
The labor market
A major cause of economic inequality within
modern market economies is the determina-
tion of wages by the market. In this view, in-
equality is caused by the differences in the
supply and demand for d