inequality Flashcards
what is income?
a flow concept
what is wealth?
a stock concept
define inequality ?
the size of the gap between the rich and poor
define progressive tax?
where higher earners pay a higher percentage of income as tax
what is an example of a progressive tax?
income tax
what is an example of a regressive tax?
VAT / demerit goods- alcohol
define allocative efficiency ?
where demand and allocation of resources match consumer preference
name 4 sources of inequality
- education - qualifications
- geographical location - mobility
- inheritance
- access to merit goods - healthcare
what does a gini coefficient of 1 represent ?
perfect inequality
what number as a gini coefficient represents perfect equality ?
0
how do you work out the gini coefficient from the lorenz curve?
A / A+B
what does the 45 degree line represent on the lorenz curve diagram ?
perfect equality
what are the axis on the lorenz curve ?
x axis - % population
y axis - % income
what is the gini index in the US?
over 40%
what is the gini index in Sweden ?
25%
what was the average income for the richest 5th of households in 2011-2012? and how much greater is it than the poorest 5th?
£78,300
14x greater
what has happened to the number of billionaires since 2009?
they have doubled
how has the use of food banks risen since 2009?
increased by 3500%
from 26,000 to 1 million
what is one solution for a gap in wages ?
Universal Basic Income
national minimum wage
evaluation to increasing progressive tax?
tax evasion
evaluation to the monetary benefits made by government intervention?
over reliance - poverty trap = where there is a disincentive for people to find work due to a potential loss of benefits
what is the current minimum wage ?
25+ = £8.72
reasons for gender inequality ?
discrimination
child care costs
trends and role models
benefits of UBI ?
- eliminates the stigma around claiming benefits
- provides financial stability in the gig economy
- employment mobility - go into social work
- reduced absolute poverty
drawbacks of UBI ?
- can be used to fund de-merit goods
- higher tax to fund UBI
- opportunity cost for the government (government spending)
define universal basic income ?
when all adults receive a no strings attached amount of money from the state to cover the basic cost of living regardless of their wealth or income
