Title: The causes of economic inequality.
Headings: The Causes of Economic Inequality
The Causes of Economic Inequality
By: May Leung
Difference in income plays a role
(i) Wages are determined by labor market
(ii) Education affects wages
(iii) Growth in technology widens income gap
(iv) Gender does matter
(v) Personal factors
Inequality is a vicious cycle
Chart 1
Chart 2
From a broader perspective: Economic policies and structure
(ii) Globalization
(iii) A Kuznets curve – Phases of development
Figure 1: Kuznets Curve
Edited by Angela Lutz
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Content: Hence, the income gap among workers also has widened. (iv) Gender does matter
In many countries, there is a gender income gap in the labor market [3]. For example, in America, the median full-time salary for women is 77 percent of that of men [4]. However, women who work part time make more on average than men who work part-time [4]. Additionally, among people who never marry or have children, women make more than men [4]. It may be difficult to justify such differences. According to a U.S. Census report [4], the wage gap is not fully explained even after accounting for key factors that affect earnings, such as discrimination and the tendency of women to consider factors other than pay when looking for work. The only thing we know for sure is that gender does contribute to a difference in wages in society and hence economic inequality. (v) Personal factors
It is generally believed that innate abilities play a part in determining the wealth of an individual. Hence, individuals possessing different sets of abilities may have different levels of wealth, leading to economic inequality [3].