Causes And Consequences Of Income Inequality

This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.

Despite the economic boom of the 1990s, the gap between the wealthy and the poor in the United States is growing larger. While ample evidence exists to validate perceived trends in wage, income, and overall wealth disparity, there is little agreement on the causes of such inequality and what might be done to alleviate it. This volume draws together a panel of distinguished scholars who address these issues in terms comprehensible to noneconomists. Their findings are surprising, suggesting that factors such as trade imbalances, immigration rates, and differences in educational resources do not account for recent increases in the inequality of wealth and earnings. Rather, the contributors maintain that these discrepancies can be attributed to workplace demand for high-skilled labor. They also insist that further research must examine the organization of industry in order to better understand the concurrent devaluation of manual labor. Addressing a topic that is of considerable public interest, this collection helps move the issue of increasing economic inequality in America to the center of the public policy arena. Contributors: Donald R. Deere, Claudia Goldin, Lawrence F. Katz, James P. Smith, Franco Peracchi, Gary Solon, Eric A. Hanushek, Julie A. Somers, Marvin H. Kosters, William Cline, Finis Welch, Angus Deaton, Charles Murray, Kevin Murphy

"Rising income inequality has been at the forefront of public debate in Canada in recent years, yet there is still much to be learned about the economic forces driving the distribution of earnings and income in this country and how they might evolve in coming years. With research showing that the tax-and-transfer system is less effective than in the past in counteracting growing income disparities, the need for policy-makers to understand the factors at play is all the more urgent. The Institute for Research on Public Policy, in collaboration with the Canadian Labour Market and Skills Researcher Network, has gathered some of the country’s leading experts to provide new evidence on the causes and effects of rising income inequality in Canada and to consider the role of policy. Their research and analysis constitutes a comprehensive review of Canadian inequality trends in recent decades, including changing earnings and income dynamics among middle--class and top earners, wage and job polarization across provinces, and persistent poverty among vulnerable groups. The authors also examine the changing role of education and unionization, as well as the complex interplay of redistributive policies and politics, in order to propose new directions for policy. Amid growing anxieties about the economic prospects of the middle class, Income Inequality: The Canadian Story will inform the public discourse on this issue of central concern for all Canadians."--Publisher's website.

Research in Labor Economics volume 43 contains new and innovative research on the causes and consequences of inequality.

This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth---that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.

In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.

Inequality has emerged as a key development challenge. It holds implications for economic growth and redistribution and translates into power asymmetries that can endanger human rights, create conflict, and embed social exclusion and chronic poverty. For these reasons, it underpins intense public and academic debates and has become a dominant policy concern within many countries and in all multilateral agencies. It is at the core of the 17 goals of the UN 2030 Agenda for Sustainable Development. This book contributes to this important discussion by presenting assessments of the measurement and analysis of global inequality by leading inequality scholars, aligning these to comprehensive reviews of inequality trends in five of the world's largest developing countries - Brazil, China, India, Mexico, and South Africa.