Economic Inequality Analysis

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1. Introduction The issue of economic inequalities has become more and more important nowadays and is expected to be an even more important topic in the future. According to the Organization for Economic Co-operation and Development (OECD) (2014) economic inequality is described by the gap between rich and poor and the unequal distribution of income. However it does not only deal with the distribution of income. During the time the distribution of for instance education opportunities became also an important factor especially in emerging economies. “Emerging economies are low-income, rapid growth countries using economic liberalization as their primary engine of growth” (Hockisson, Eden & Lau, 2000, p. 249). Nearly every comprehensive assessment…show more content…
During the time economists began to do research on methods how to assess economic inequalities by taking the level of income as a basis of their calculations. One of the two methods of measuring inequalities is the Gini coefficient. “The Gini coefficient (Gini, 1909, Gini, 1912) is one of the most widely used measures of income inequality. It is frequently explained in terms of the Lorenz curve (Lorenz, 1905), which plots the cumulative distribution of income against the cumulative percentage of population (where the data are ordered from the lowest income individuals or groups, to the highest)” (Rogerson, 2013, p.…show more content…
The paper mentions some of them in the first section of the main part. One of the big factors is income inequality, which is described and measured using the Gini coefficient and the Lorenz curve. Furthermore the informal sector plays a big role. People working in this sector are most likely not covered by insurance and thus have a much higher risk to keep living in poverty due to job insecurity and underpayment. Another key factors driving inequalities is education. People do not have access to higher education in most of the EEs but the development is positive. EEs begin to build universities and start sending their young workforce to highly developed countries to gain knowledge and bring it back to their country. In contrast to the drivers there are mostly governmental policies tackling inequalities. Governments try to implement unemployment protection legislations to give more rights to people and give an incentive to work in the formal sector. The second factor discussed this paper are the minimum wage policies with which the government attempts to move people out of poverty and bring wages to a more equal level. Although there are exceptions in many of the EEs the implementation of minimum wages was done in most of them and is starting to

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