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: the level of education is often proportional to the level of skill. With a higher level of education, a person often has more advanced skills that few workers are able to offer, justifying a higher wage. The impact of education on economic inequality is still profound in developed countries and cities [3]. Although there are usually policies of free education in developed nations, levels of education received by each individual still differ, not because of financial ability but innate qualities like intelligence, drive and personal ability. For example, in Hong Kong, 12 years of free education are provided for each citizen, not covering tertiary education, offered only when students receive certain results on public exams. Moreover, receiving the same level of education does not mean receiving education of the same quality. This accounts for the difference in abilities and hence wages for individuals all receiving, for example, 12 years of education. Therefore, it seems no matter how good the social welfare policy of a country is at preventing denial of education due to financial difficulties, differences in education, in terms of levels and quality, still play a prominent role in economic inequality. (iii) Growth in technology widens income gap
Growth in technology arguably renders joblessness at all skill levels [3]. For unskilled workers, computers and machinery perform a lot of tasks these workers used to be do.