Inequality Flashcards
Gini Coefficient
A measure of inequality of any quantity such as income or wealth, varying from a value of zero (where there is no inequality) to one (if a single individual receives all of it).
GC = A/A+B
Market income
Income from wages, salaries business and investments
Unequal Distribution (wealth, earnings, disposable income)
Wealth is much more unequally distributed than earnings and earnings are much more unequally distributed than disposable income
Lorenz Curve
A graphical indication of what income inequality looks like for a country.
y-axis: cumulative % of income
x-axis: cumulative % of population
Line through origin: perfect equality
Closer/Further away Lorenz Curve
The closer the Lorenz curve is to perfect equality means that there is less income inequality vice versa
Endowment
The facts about an individual that may affect his/her’s income such as physical wealth, land, housing etc.
Segmented labour market
A labour market whose distinct segments function as seperate labour markets with limited mobility of workers from one segment to another (e.g due to racism, language or any other form of discrimination).
Inequality aversion
A dislike of outcomes in which some individuals receive more than others
Intergenerational inequality
The extent to which differences in parental generations are passed onto the next generation, as measured by IG correlation/elasticity
Categorical inequality
Inequality between particular social groups
Progressive (policy)
An expenditure or transfer that increases the incomes of poorer households more than richer households in percentage terms.
Regressive (policy)
An expenditure or transfer that increases the incomes of richer households more than poorer households in percentage terms.
Predistribution Policy
Government actions that affect the endowments people have and their value
Redistribution Policy
Taxes, monetary and in-kind transfers of the government that result in a final distribution of income that differs from the distribution of market income (e.g a rich family pays more tax and that money is used on things such as public goods to help the poor).
