Editing Income distribution (section)

== Trends ==
[[File:Kuznets curve-en.svg|160px|thumb|Idealized hypothetical Kuznets curve]]

Standard economic theory stipulates that inequality tends to increase over time as a country develops, and to decrease as a certain average income is attained. This theory is commonly known as the [[Kuznets curve]] after [[Simon Kuznets]]. However, many prominent economists disagree with the need for inequality to increase as a country develops. Further, empirical data on the proclaimed subsequent decrease of inequality is conflicting.

Across the board, a number of industries are stratified across the genders. This is the result of a variety of factors. These include differences in education choices, preferred job and industry, work experience, number of hours worked, and breaks in employment (such as for bearing and raising children). Men also typically go into higher paid and higher risk jobs when compared to women. These factors result in 60% to 75% difference between men's and women's average aggregate [[Wage|wages]] or [[Salary|salaries]], depending on the source. Various explanations for the remaining 25% to 40% have been suggested, including women's lower willingness and ability to negotiate salary and [[sexual discrimination]].<ref>{{citation |author=CONSAD Research Corporation |title=An Analysis of Reasons for the Disparity in Wages Between Men and Women |url=http://www.consad.com/content/reports/Gender%20Wage%20Gap%20Final%20Report.pdf |archive-url=https://web.archive.org/web/20131008051216/http://www.consad.com/content/reports/Gender%20Wage%20Gap%20Final%20Report.pdf |url-status=dead |archive-date=8 October 2013}}</ref><ref>{{cite web |author=Patten, Eileen |date=14 April 2015 |title=On Equal Pay Day, key facts about the gender pay gap |url=http://www.pewresearch.org/fact-tank/2015/04/14/on-equal-pay-day-everything-you-need-to-know-about-the-gender-pay-gap/ |website=Pew Research Center |access-date=11 November 2023 |archive-date=16 April 2015 |archive-url=https://web.archive.org/web/20150416052153/http://www.pewresearch.org/fact-tank/2015/04/14/on-equal-pay-day-everything-you-need-to-know-about-the-gender-pay-gap/ |url-status=dead }}</ref><ref name="Blau">{{cite journal |last1=Blau |first1=Francine D. |last2=Kahn |first2=Lawrence M. |title=The Gender Pay Gap: Have Women Gone as Far as They Can? |journal=Academy of Management Perspectives |date=February 2007 |volume=21 |issue=1 |pages=7–23 |doi=10.5465/AMP.2007.24286161 |s2cid=152531847 }}</ref> According to the [[European Commission]] direct discrimination only explains a small part of gender wage differences.<ref>{{cite book |title=Tackling the Gender Pay Gap in the European Union |date=2013 |publisher=Publications Office of the European Union |isbn=978-92-79-28821-0 |url=http://ec.europa.eu/justice/gender-equality/files/gender_pay_gap/140319_gpg_en.pdf }}</ref><ref>{{cite web |title=What are the causes? - European Commission |url=http://ec.europa.eu/justice/gender-equality/gender-pay-gap/causes/index_en.htm |access-date=18 February 2016 |website=ec.europa.eu}}</ref>

A study by the [[Brandeis University]] Institute on Assets and Social Policy which followed the same sets of families for 25 years found that there are vast [[Affluence in the United States#Race|differences in wealth across racial groups]] in the United States. The wealth gap between Caucasian and African-American families studied nearly tripled, from $85,000 in 1984 to $236,500 in 2009. The study concluded that factors contributing to the inequality included years of home ownership (27%), household income (20%), education (5%), and familial financial support and/or inheritance (5%).<ref name="Shapiro1">{{cite web |author=Thomas Shapiro |author-link=Thomas Shapiro |author2=Tatjana Meschede |author3=Sam Osoro |date=February 2013 |title=The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide |url=http://iasp.brandeis.edu/pdfs/Author/shapiro-thomas-m/racialwealthgapbrief.pdf |access-date=16 March 2013 |work=Research and Policy Brief |publisher=[[Brandeis University]] Institute on Assets and Social Policy}}</ref> In an analysis of the American Opportunity Accounts Act, a bill to introduce [[Baby bonds|Baby Bonds]], [[Morningstar, Inc.|Morningstar]] reported that by 2019 white families had more than seven times the wealth of the average Black family, according to the [[Survey of Consumer Finances]].<ref>{{Cite web |last=Szapiro |first=Aron |date=6 October 2020 |title=Can Baby Bonds Shrink the Racial Wealth Gap? |url=https://www.morningstar.com/articles/1003066/can-baby-bonds-shrink-the-racial-wealth-gap |access-date=2021-08-04 |website=Morningstar.com |language=en}}</ref>

There are two ways of looking at income inequality, within country inequality (intra-country inequality) – which is inequality within a nation; or between country inequality (inter-country inequality) which is inequality between countries.

According to intra-country inequality at least in the OECD countries, a May 2011 report by [[OECD]] stated that the gap between rich and poor within OECD countries (most of which are "high income" economies) "has reached its highest level for over 30 years, and governments must act quickly to tackle inequality".<ref>[http://www.oecd.org/document/40/0,3746,en_21571361_44315115_49166760_1_1_1_1,00.html Society: Governments must tackle record gap between rich and poor, says OECD]</ref>

Furthermore, increased inter-country income inequality over a long period is conclusive, with the Gini coefficient (using PPP exchange rate, unweighted by population) more than doubling between 1820 and the 1980s from .20 to .52 (Nolan 2009:63).<ref>Nolan, P., 2009. Crossroads: The End of Wild Capitalism Marshall Cavendish: London, New York</ref> However, scholars disagree about whether inter-country income inequality has increased (Milanovic 2011),<ref name="Milanovic, B. 2011">Milanovic, B., 2011. Haves and the Have-Nots, Basic Books: New York</ref> remained relatively stable (Bourguignon and Morrisson 2002),<ref>{{Cite journal|doi=10.1257/00028280260344443|title=Inequality Among World Citizens: 1820–1992|journal=American Economic Review|volume=92|issue=4|pages=727–744|year=2002|last1=Bourguignon|first1=François|last2=Morrisson|first2=Christian|citeseerx=10.1.1.5.7307}}</ref> or decreased (Sala-i-Martin, 2002)<ref>{{cite report |last1=Sala-i-Martin |first1=Xavier |title=The Disturbing 'Rise' of Global Income Inequality |date=April 2002 |doi=10.3386/w8904 |hdl=10230/524 |ssrn=311593 }}</ref> since 1980.  What Milanovic (2005) <ref>Milanovic, B., 2005. Worlds Apart: Measuring International and Global Inequality, Princeton University Press: Princeton</ref> calls the “mother of all inequality disputes” emphasizes this debate by using the same data on Gini coefficient from 1950 to 2000 and showing that when countries’ GDP per capita incomes are unweighted by population income inequality increases, but when they are weighted inequality decreases.  This has much to do with the recent average income rise in China and to some extent India, who represent almost two-fifths of the world.  Notwithstanding, inter-country inequality is significant, for instance as a group the bottom 5% of US income distribution receives more income than over 68 percent of the world, and of the 60 million people that make up the top 1% of income distribution, 50 million of them are citizens of Western Europe, North America or Oceania (Milanovic 2011:116,156).<ref name="Milanovic, B. 2011" />

[[Larry Summers]] estimated in 2007 that the lower 80% of families were receiving $664 billion less income than they would be with a 1979 income distribution, or approximately $7,000 per family.<ref>{{cite web |author=Larry Summers |title=Harness market forces to share prosperity |url=http://larrysummers.com/commentary/financial-times-columns/harness-market-forces-to-share-prosperity-june-24-2007/ |access-date=21 September 2015}}</ref> Not receiving this income may have led many families to increase their debt burden, a significant factor in the 2007–2009 [[subprime mortgage crisis]], as highly leveraged homeowners suffered a much larger reduction in their net worth during the crisis. Further, since lower income families tend to spend relatively more of their income than higher income families, shifting more of the income to wealthier families may slow economic growth.<ref name="Mian and Sufi2014">{{cite book |last1=Mian |first1=Atif |title=House of Debt |title-link=House of Debt |last2=Sufi |first2=Amir |publisher=University of Chicago |year=2014 |isbn=978-0-226-08194-6}}</ref>{{specify|date=April 2020}}

In a [[TED (conference)|TED]] presentation [http://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html shown here] {{Webarchive|url=https://web.archive.org/web/20140301073946/http://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html |date=2014-03-01 }}, [[Hans Rosling]] presented the distribution and change in income distribution of various nations over the course of a few decades along with other factors such as [[child survival]] and [[fertility rate]].

As of 2018, Albania has the smallest gap in wealth distribution with Zimbabwe having the largest gap in wealth distribution.<ref>{{Cite web|url=https://www.gfmag.com/global-data/economic-data/wealth-distribution-income-inequality|title=Wealth Distribution and Income Inequality by Country 2022|last1=Ventura|first1=Luca | website=Global Finance Magazine|date=12 January 2022 }}</ref>

These trends underscore the complexity of income distribution as a global challenge. While the specifics can vary greatly by region and country, the common themes of technological change, globalization, policy choices, and demographic shifts play pivotal roles in shaping the dynamics of income inequality worldwide. Addressing these issues requires a nuanced understanding of both global trends and local contexts, as well as coordinated efforts across multiple sectors of society.