Visit the following website: http://inequality.stanford.edu/publications/20-fact
ID: 3144293 • Letter: V
Question
Visit the following website: http://inequality.stanford.edu/publications/20-facts-about-us-inequality-everyone-should-know. Consider both wage inequality in Fig 1 and wealth inequality in Fig 15. Using the data provided in the above link, please comment on what you think are driving both types of inequality. For example, do you think one factor or set of factors have more explanatory power than others? Be sure to reference specific data in the above link and explain why or why not certain factors may be more important than others.
Explanation / Answer
Wage inequality refers to the extent to which wages are distributed unevenly among a set of people.The factors that drive it could be globalization,education,technological change, Tax policies , Changes in political environment, Wage theft etc.According to the Fig., the lower tail inequalty rose sharply after a certain time period. The reason behind the rise could be the same as stated above.
Wealth inequalty is the uneven distribution of assets among a set of people. The factors that drive it could be globalization,education,labor markets,taxes,gender,economic development etc. According to the figure, the concentration of wealth's proportion increased with the time period. The reason behind the rise could be the same as stated above.
The factors like globalization,education, technological changes etc. are more explanatory than other factors. This is because these factors have a huge impact on both inequalities or we can say a direct impact. Technological changes which are based on the skills of people have the power to drive the concentration towards more skilled people thus wage and wealth proportion for them increases simultaneously. Similarly, if we talk about education and globalization , they also tend to concentrate the inequalities towards more educated people as we know that more education leads to a better job and a better financial status.
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