Editing Income distribution (section)

== How to improve income equality ==

Source:<ref>{{Cite web|title=Income Distribution: What can be done to improve income inequality?|url=https://www.sparknotes.com/economics/micro/incomedistribution/section2/|access-date=25 April 2021|website=SparkNotes|language=en}}</ref>

=== Taxes ===
The progressive income tax takes a larger percentage of high incomes and a smaller percentage of low incomes. Effectively, the poorest pay the least of their earned incomes on taxes which allows them to keep a larger percentage of wealth. Justification can be illustrated by a simple heuristic: The same dollar amount of money (e.g. $100) has a greater economic impact on only one party—the poor. That same amount has little economic impact on a wealthy individual, so the disparity is addressed by ensuring the richest individuals are taxed a greater share of their wealth. The state then uses the tax revenue to fund necessary and beneficial activities for the society at large. Every person in this system would have access to the same social benefits, but the rich pay more for it, so [[progressive tax]] significantly reduces the inequality.

===Education and Skill Development===
Universal Access to Quality Education: Ensuring that all individuals have access to quality education can reduce income inequality by equipping people with the skills they need to succeed.
Lifelong Learning and Retraining Programs: Support for ongoing education and retraining can help workers adapt to changing economic conditions and job markets.

===International Cooperation===
Work with other countries to establish international standards for labor rights, tax policies, and corporate governance to prevent a "race to the bottom" in terms of wages and working conditions.


=== Housing subsidies ===
The rent and upkeep of housing form a large portion of spending in the lower income families. Housing subsidies were designed to help the poor obtaining adequate housing.

=== Welfare and Unemployment benefits ===
This provides actual money to the people with very low or no income and gives them an absolute freedom in decision-making how to use this benefit. This works best if we assume that they are rational and make decisions in their best interest.

=== Income mobility ===
[[Income mobility]] is another factor in the study of income inequality. It describes how people change their economic [[well-being]], i.e. move in the hierarchy of [[earning power]] over their lifetime. When someone improves his economic situation, this person is considered upwardly mobile.
Mobility can vary between two extremes: 1) [[wealth|rich people]] stay always rich and [[poverty|poor]] stay always poor: people cannot easily change their economic status and inequality then seems as a permanent problem. 2) individuals can easily shift their income class, e.g. from middle earning class to upper class or from lower class to middle class. Inequality is "fluid" and temporary so it does not create a serious permanent problem.<ref name="SparkNotes">{{cite web | title=Income Distribution: Income Distribution | website=SparkNotes | url=https://www.sparknotes.com/economics/micro/incomedistribution/section1/ | access-date=2023-04-02}}</ref>

====Measuring income mobility====
Mobility is measured by the association between parents´ and adult children's socioeconomic standing, where higher association means less mobility. Socioeconomic standing is captured by four different measures:<ref>{{cite web|title=How do we characteristically measure and analyze intergenerational mobility?|author=Florencia Torche|url=http://cpi.stanford.edu/_media/working_papers/torche_how-do-we-measure.pdf|publisher=The Stanford Center on Poverty and Inequality|date=2013|access-date=2023-04-02}}</ref>

#[[Occupational status]]: – it is weighted average of the mean level of earnings and education of certain occupations. It has advantages such a collecting important information about parents, which can be reported retrospectively by adult children. It also remains relatively stable in between the occupation career so single measuring provides adequate information of long run standing. On the other hand, it has also limitations for the mobility analyzing. Whereas occupational earning of men usually tends to be higher than by women, by the occupational education it is the other way around.
#[[Class mobility]]: – Classes are instead categorical groupings based on specific occupational assets that determine life chances as expressed in outcomes such as income, health or wealth.
#Earnings mobility: – Earning mobility evaluates the relationship between two certain generations by means of linear regression (upper math) of the long transformed measure of children's and parents' earnings.
# Total [[family income]] mobility and the mobility of women: – Old economic analysis has been making one mistake, that they did analysis that focused mostly on the father-son pairs and their individual earnings. In the last two decades, they have expanded their research and now they focus more on the mother-daughter pairs as well. Generally earnings provides a stable measure of well-being independently of another financial assets or any kind of transfers.

=== Labor union ===
It is known that [[labor union]] reduces the income inequality in both private and public sectors, and research conducted by [[David Card]] et al. showed that unionization redressed the income inequality in America and Canada, especially in their public sectors. For American male workers, the reduction of wage inequality was 1.7 percent in the private sector, while the reduction was 16.2 percent in the public sector. For American female workers, the reductions were 0.6 percent and 10.7 percent in the private and public sectors, respectively. In Canada, reduction effects were likewise more noticeable in the public sector.<ref> {{cite journal 
| title = Unions and wage inequality: The roles of gender, skill and public sector employment.
| journal = Canadian Journal of Economics
| volume = 53 
| date = Feb 2020
| vauthors = Card D, Lemieux T, Riddell WC 
| pages = 140–173
| doi = 10.1111/caje.12432
| url = https://econpapers.repec.org/RePEc:iza:izadps:dp11964
}}
</ref>