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In this Chapter, we seek to understand why and how income distribution is changing and to identify those types of government policies which can and cannot help rectify income inequality over time.

We will see, in this and in many following chapters, that many policies used in the past that were ostensibly intended to improve income distribution have either had little effect or have, on occasion, actually worsened this problem. One policy, however, appears to have been successful virtually everywhere. In this and subsequent Chapters, we will examine the most potent policy for rectifying economic inequality: expansion in investment in human capital, especially education and public health. Some important implications of investment in human capital are covered in this Chapter; a fuller discussion is presented in Chapter 5.

Concepts for understanding income distribution issues: the gini coefficient

The gini coefficient

Traditionally, the best measure of income inequality or equality has been the Gini Coefficient: Also known as the Gini Index. The Gini ratio is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper “Variability and Mutability.”

Gini= 0 Perfect Equality (everyone earns the same).
Gini= 1 Extreme Inequality (one person gets all the income).

Recent experience: 1980s-2008

1980 2008
U.S. Gini 0.34 0.38 By one measure, some increase in inequality, continuing through 2013, to 0.44. (However, see estimates cited later in Chapter).
Germany Gini 0.26 0.30 Increase in inequality from a lower base.
China Gini 0.28 0.40 Large increase.
China Gini 0.58 0.55 Some decrease in inequality.

In 2000, Brazil had the most unequally distributed income in the world. But by 2008, income inequality there had lessened, partly because of Brazil’s ambitious program of conditional cash transfers, involving direct payments to low income families with children in school. This program is discussed extensively in Chapter___. [MG: NEED SOURCE]

Alt text needed

The World Gini 1985 began rising in 1992, and then began a slight decline after 2000. Figure 4-1 displays the evolution of world inequality (or equality) from 1960 to 2012, as measured by the Gini coefficient. The graph shows more or less constant worldwide Gini coefficients after 1963 and until 1983. Then, income inequality began to increase. By 2000, the worldwide Gini reached a maximum of about 0.54, after which it began to slowly decline. What we observe in Figure 4-1 is entirely consistent with what we will find in the remainder of this Chapter and this book.

Efforts to understand the many complexities of income distribution issues in emerged nations may be enhanced by considering possible cause and consequences of rising inequality in the wealthy nations of Europe and North America for four reasons.

First trends in income distribution in developed nations, may, in a globalizing world, presage what might soon occur in emerging nations. Second, the study of income distribution issues anywhere involves difficult empirical and methodological questions. If improperly handled, resolution of these questions can lead to unwarranted conclusions. Third, the literature on income distribution in developed nations is substantial, with important lessons for the interpretation of income distribution studies in emerging nations. Finally, recent research on income distribution shows that the observed distribution of income anywhere is greatly affected by how income is measured (pre-tax vs. post-tax, pre-transfer vs. post-transfer) can materially affect conclusions about income distribution trends.

Questions & Answers

what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
Bharti
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
Daniel
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
Maciej
characteristics of micro business
Abigail
for teaching engĺish at school how nano technology help us
Anassong
Do somebody tell me a best nano engineering book for beginners?
s. Reply
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
s.
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
Tarell
what is the actual application of fullerenes nowadays?
Damian
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
Tarell
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
Virgil
is Bucky paper clear?
CYNTHIA
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Harper
Do you know which machine is used to that process?
s.
how to fabricate graphene ink ?
SUYASH Reply
for screen printed electrodes ?
SUYASH
What is lattice structure?
s. Reply
of graphene you mean?
Ebrahim
or in general
Ebrahim
in general
s.
Graphene has a hexagonal structure
tahir
On having this app for quite a bit time, Haven't realised there's a chat room in it.
Cied
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
China
Cied
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
Porter
many many of nanotubes
Porter
what is the k.e before it land
Yasmin
what is the function of carbon nanotubes?
Cesar
I'm interested in nanotube
Uday
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
what is nano technology
Sravani Reply
what is system testing?
AMJAD
preparation of nanomaterial
Victor Reply
how to synthesize TiO2 nanoparticles by chemical methods
Zubear
how did you get the value of 2000N.What calculations are needed to arrive at it
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Berger describes sociologists as concerned with
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Source:  OpenStax, Economic development for the 21st century. OpenStax CNX. Jun 05, 2015 Download for free at http://legacy.cnx.org/content/col11747/1.12
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