income and wealth discrimination Flashcards
what does income refer to
Income refers to the (flow) of money received from the factors of production
Rent, wages, interest and profit
Inequality of income is caused by the unequal distribution (flow) of income to households
what does wealth refer to
refers to the stock of assets that households own
E.g Property, shares, art, pension schemes
Assets can be used to generate a flow of income
Wealth inequality refers to differences in the number of assets that households own
what are the causes of wealth and income inequality?
human capital - The higher the skill level, the higher the level of income
A country with a poor education system will see greater inequality than one with a good education system
Inequality of opportunity-Access to education and health can vary significantly within communities and between different regions
Inequality in education and healthcare leads to inequality of opportunity in the job market
Assets-Assets generate income and increase in value
These assets are then passed on to the next generation through inheritance or gifts, widening wealth disparities
discrimination - Gender, race or any other discrimination increases income inequality in an economy
unequal power
gov policies
globalisation
what is progressive tax systems ?
a system that applies high level of tax to higher level of income also lower income level paying a lower level of income tax
globalisation -
Globalisation is the economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology and finance
This integration of global economies has impacted national cultures, spread ideas, speeded up industrialisation in developing nations and led to de-industrialisation in developed nations
Countries which are more isolated will experience higher levels of wealth and income inequality
market based supply slide policies ?
Supply-side policies such as deregulation, privatisation and trade liberalisation can provide great opportunities but also increase inequality
what does deregulation mean?
the process of removing government controls from markets in order to increase competition
what is privatisation?
the transfer of ownership and control of firms from the public sector to private sector
what is trade liberalisation ?
removing the barriers to international trade such as tariffs , quotas etc.
what is equality /inequality?
-describes situations where economic outcomes are similar for different people or different social groups
-Income equality would mean everyone, irrespective of their job, is paid the same
-Inequality in the distribution of income is one cause of absolute and relative poverty
what is equity ?
refers to the idea of fairness and is a normative concept
Equity in the distribution of income means that there is fairness in the wage differentials that exist in society, e.g. those with higher qualifications or skills are paid more than those with les
