Consequences Of Income Inequality

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Another argued driver of income inequality in the studied area is income distribution from different sources (capital, property, investment…). Over the last 20 years, this distribution has grown to be less equal. For instance, although capital income represents only a modest share of households income, its increase in inequality in the majority of OECD countries during the last 20 year have substantially widened the inequality gap. This raise principally caused by change in the upper part of the distribution. While earnings have always been the major cause of inequality in each and every country of the area, since the mid-1990s, their contribution to income inequality remarkably fell. Self-employment also impacts the overall earnings inequality since the income it engenders tends to be less even than traditional salaries. The self employed individuals are generally concentrated in the lower social classes in the majority of OECD countries, yet its effect on inequality continues to be modest because its share of the overall labor income decreased (ranges from 3% to 13%) and represents only 15% of inequality among all workers. (OECD, 2011) 2.2.2 Consequences of Income Inequality Social…show more content…
For instance, people with disabilities tend to earn less than others. Another impact is forms of political conflicts as a shortage of education, healthcare, and social security… stimulate the assumption that the government is not working for their well being (Lichbach, 1989). When the limit of inequality is reached, the society faces the tunnel effect (Hirschman and Rothschild 1973). When a weak society experiences the tunnel effect, the sound decision would be to implement a policy that tackles growth and distribution at the same time instead of focusing only on total

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