OECD Insights

1993-6753 (online)
1993-6745 (print)
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OECD Insights are a series of reader-friendly books that use OECD analysis and data to introduce some of today’s most pressing social and economic issues. They are written for the non-specialist reader, including interested laypeople, older high-school students and university freshmen. The books use straightforward language, avoid technical terms, and illustrate theory with real-world examples. They also feature statistics drawn from the OECD’s unique collection of internationally comparable data. Online, you can find a number of special features to enhance each book’s educational potential.

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Income Inequality

Income Inequality

The Gap between Rich and Poor You or your institution have access to this content

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Brian Keeley
15 Dec 2015
9789264250024 (EPUB) ; 9789264246010 (PDF) ;9789264246003(print)

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Income inequality is rising. A quarter of a century ago, the average disposable income of the richest 10% in OECD countries was around seven times higher than that of the poorest 10%; today, it’s around 9½ times higher. Why does this matter? Many fear this widening gap is hurting individuals, societies and even economies. This book explores income inequality across five main headings. It starts by explaining some key terms in the inequality debate. It then examines recent trends and explains why income inequality varies between countries. Next it looks at why income gaps are growing and, in particular, at the rise of the 1%. It then looks at the consequences, including research that suggests widening inequality could hurt economic growth. Finally, it examines policies for addressing inequality and making economies more inclusive.

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  • Foreword

    Inequality is bad and getting worse. In the 1980s, the richest 10% of the population in OECD countries earned 7 times more than the poorest 10%. They now earn nearly ten times more. When you include property and other forms of wealth, the situation is even worse: in 2012, the richest 10% controlled half of all total household wealth and the wealthiest 1% held 18%, compared to only 3% for the poorest 40%.

  • Introduction

    Income inequality has risen in much of the world, sending the issue to the top of the policy agenda. The rise of the top 1% gains the lion’s share of attention, but there’s also concern about large numbers of low earners who look to be slipping further and further behind.

  • What are income and wealth?

    A number of key concepts are essential to any discussion of income inequality. These include the distinction between income and wealth as well as definitions and measures of inequality and poverty.

  • What's happening to income inequality?

    Income inequality has risen in many parts of the world, including in wealthy, emerging and developing countries. In parallel, many emerging countries have seen the emergence of a middle class, which, though still fragile, could play a major role in the future development of economies and societies.

  • Why is income inequality rising?

    Many factors explain the rise of income inequality. Some are economic, such as the role of technology in the globalising economy; others are social, such as shifts in who people marry; and some relate mainly to the rising incomes of top earners.

  • How does income inequality affect our lives?

    Inequality affects economies and societies, with growing evidence that excessive inequality may be bad for growth. There are also concerns that inequality may dampen educational opportunities and social mobility.

  • How can governments respond to income inequality?

    Government policy can respond to rising income inequality in many different areas, with a particular focus on three policy areas – education, jobs and taxes and transfers.

  • Bibliography
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