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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]

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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

where we get a research paper on Nano chemistry....?
Maira Reply
nanopartical of organic/inorganic / physical chemistry , pdf / thesis / review
Ali
what are the products of Nano chemistry?
Maira Reply
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
learn
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
learn
Google
da
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Bhagvanji
hey
Giriraj
Preparation and Applications of Nanomaterial for Drug Delivery
Hafiz Reply
revolt
da
Application of nanotechnology in medicine
what is variations in raman spectra for nanomaterials
Jyoti Reply
ya I also want to know the raman spectra
Bhagvanji
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
Damian
yes that's correct
Professor
I think
Professor
Nasa has use it in the 60's, copper as water purification in the moon travel.
Alexandre
nanocopper obvius
Alexandre
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
Rafiq
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
Damian
How we are making nano material?
LITNING Reply
what is a peer
LITNING Reply
What is meant by 'nano scale'?
LITNING Reply
What is STMs full form?
LITNING
scanning tunneling microscope
Sahil
how nano science is used for hydrophobicity
Santosh
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
Rafiq
what is differents between GO and RGO?
Mahi
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
Rafiq
if virus is killing to make ARTIFICIAL DNA OF GRAPHENE FOR KILLED THE VIRUS .THIS IS OUR ASSUMPTION
Anam
analytical skills graphene is prepared to kill any type viruses .
Anam
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
Hafiz
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
Bob
The nanotechnology is as new science, to scale nanometric
brayan
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Damian
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
Renato
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
?
Kyle
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
Adin
why?
Adin
what school?
Kyle
biomolecules are e building blocks of every organics and inorganic materials.
Joe
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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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