Week 2: Inequality: Online lecture

Question 1

Why is inequality important to address?

Answer 1

• Moral imperative
• poverty trap
• leads to social unrest
• Negative effects on economic growth and sustainability

Question 2

What is shared prosperity?

Answer 2

Growth in income of the bottom 40% compared to all others; essential for poverty reduction.

Question 3

How has global inequality changed since 1800?

Answer 3

• GDP increased and GDP/capita differences decreased (inequality between countries) :)
• ## Inequality within rich countries increased, especially since the 1970s (especially english speaking countries ?!)

Question 4

What are recent causes of rising inequality?

Answer 4

• Climate change, COVID-19 (hitting the poor the hardest)
• Globalization and technology shifts
• Decline in progressive taxation

Question 5

Why is it important to reduce inequality in terms of environmental sustainability?

Answer 5

Richest 1% emit more
than twice as much CO2
as poorer half (1995-
2015)

Question 6

How does inequality affect health in the USA?

Answer 6

• Low life expectancy ( one of the
  lowest among rich countries)
• Many lack insurance or basic nutrition

Question 7

What are the social impacts of income inequality?

Answer 7

• Social segregation
• Increased crime
• political discontent & lower political participation
• Decreasing solidarity and trust

However difficult to prove causality

Question 8

What are the causes specific to the USA, leading to increased inequality? According to Joseph Stiglitz.

Answer 8

** Tax System: **Less progressive, leading to reduced government revenue for welfare, healthcare, and education.
* Urban-Rural Divide: Economic investments concentrated in urban areas.
** Institutional Shifts: ** Decline in union strength.
* Wealth Concentration:
* Shareholders, not workers, reap the benefits.
* Inheritance laws favor wealth accumulation.
* Political Influence: Money-driven political decisions (“one dollar, one vote”).

Question 9

What does lack of social mobility mean?

and what is the third factor leading to inequality in the Netherlands

Answer 9

Inequality reproduces across generations due to factors like **
- parental income
- location

gender

Question 10

What are the consequences of inequality on happiness?

Answer 10

Inequality lowers happiness, particularly in Latin America and other regions.

Question 11

How can income inequality be reduced?

Answer 11

• Progressive taxes (income, inheritance) & reducing tax evasion
  - Minimum wage, Universal basic income, Maximum wage
• Investment in Education, child benefits, healthcare, utilities, transport (=poverty reduction)
  - Regulations ( 1: about unions, labour rights, 2: reudcing discrimination of gender and race, 3: Anti-corruption and corporate law)