Income Inequality: Difference between revisions
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[https://courses.lumenlearning.com/suny-oldwestbury-publicfinanceandpublicpolicy/chapter/government-policies-to-reduce-income-inequality/ by lumen] | [https://courses.lumenlearning.com/suny-oldwestbury-publicfinanceandpublicpolicy/chapter/government-policies-to-reduce-income-inequality/ by lumen] | ||
No society should expect or desire complete equality of income at a given point in time, for a number of reasons. First, most workers receive relatively low earnings in their first few jobs, higher earnings as they reach middle age, and then lower earnings after retirement. Thus, a society with people of varying ages will have a certain amount of income inequality. Second, people’s preferences and desires differ. Some are willing to work long hours to have income for large houses, fast cars and computers, luxury vacations, and the ability to support children and grandchildren. | No society should expect or desire complete equality of income at a given point in time, for a number of reasons. First, most workers receive relatively low earnings in their first few jobs, higher earnings as they reach middle age, and then lower earnings after retirement. Thus, a society with people of varying ages will have a certain amount of income inequality. Second, people’s preferences and desires differ. Some are willing to work long hours to have income for large houses, fast cars and computers, luxury vacations, and the ability to support children and grandchildren. | ||
=====Spreading the Wealth===== | |||
[https://www.imf.org/en/Publications/fandd/issues/2018/03/bourguignon by FRANÇOIS BOURGUIGNON 3/18 INTERNATIONAL MONETARY FUND] | |||
In countries where growth is satisfactory but benefits the poor much less than the non-poor, there obviously is a strong case for shifting resources from those at the top of the income scale to those at the bottom. Giving poor children access to better education and paying for it by taxing the affluent is one way to reduce inequality while also fostering future growth and poverty reduction. Redistributive policies could also help narrow the gap between rich and poor in countries with high inequality, where social and political tensions or the rise of populist regimes might prove bad for growth in the long run. | |||
