Income inequality

What would a measure of wealth include?

Oct/Nov 2025

A country’s income Gini coefficient rises from $0.29$ to $0.33$ over a period of time. What could account for this change?

Oct/Nov 2025

At what point is a minimum wage most likely to help lessen the issue of income inequality?

Oct/Nov 2025

The Gini coefficient for South Korea was estimated at 0.39 in 2019 and 0.33 in 2022. Explain what this data shows, how the government of South Korea might use it and evaluate how useful it is.

Oct/Nov 2025

What relationship does the Kuznets curve indicate between economic development and inequality?

Oct/Nov 2025

The diagram illustrates a Lorenz curve for the distribution of households’ income in a country. Which curve indicates the most equal distribution of households’ income?

Oct/Nov 2025

Which diagram is not an example of a Kuznets curve?

Oct/Nov 2025

The table presents the value of the Gini coefficient for an economy from 2018 to 2020. What is most likely to account for the change in the value of the Gini coefficient between 2018 and 2020?

Oct/Nov 2025

Which variables are displayed on the axes of a Kuznets curve diagram?

Oct/Nov 2025

What factors could lead to a country’s income inequality becoming worse?

Oct/Nov 2025

Which one of these actions demonstrates equality rather than equity?

Oct/Nov 2025

A government commission released a report stating that global poverty and inequality were getting worse and warning that the divide between rich and poor could widen further. However, a newspaper argues that much of what is claimed about inequality is incorrect. It ignores the fact that the past 50 years brought a dramatic decline in global inequality. The usual measure of relative inequality is the Gini coefficient. The global inequality figure was 0.75 in 1975, 0.72 in 2020 and 0.67 in 2022. The reduction in global inequality ought not to be unexpected. For around two hundred years, the gains from industrialisation mainly went to countries in Europe and North America. Income inequality between these countries and poorer countries became worse. The spread of globalisation in recent decades has reduced this gap. Countries such as China and India have seen very large rises in per capita (average) income, as shown in Table 1.1. Once per capita incomes rise by this amount, some degree of inequality may not matter. In fact, it may even be a required condition for economic growth. Rather than focusing on removing inequality, the emphasis could be on the absolute situation of the poorest people. If the priority is easing poverty instead of increasing the wealth of the richest, improvements can be identified. Life expectancy has risen, especially by ten years over the past two decades in the poorest region of sub-Saharan Africa. Literacy rates have also gone up. The number of people in absolute poverty worldwide has dropped from more than a third to below a tenth of the world’s population. All of this has happened while the world’s population has grown. Opponents of globalisation and foreign direct investment (FDI) by multinational companies highlight the possible harmful environmental consequences, the weakening of individual cultures and dependence on international financial institutions that may fail. They also argue that workers can be exploited, causing wider wage inequality, and that cheaper imports may increase domestic unemployment.

Oct/Nov 2025