Income & Wealth Distribution (AQA A Level Economics)

The higher the skill level, the higher the level of income

A country with a poor education system will see greater inequality than one with a good education system

Access to education and health can vary significantly within communities and between different regions

Inequality in education and healthcare leads to inequality of opportunity in the job market

Assets generate income and increase in value

These assets are then passed on to the next generation through inheritance or gifts, widening wealth disparities 

Gender, race or any other discrimination increases income inequality in an economy

Countries with strong trade union membership provides workers with more power and higher levels of income

With low trade union membership, the exploitation of workers through low wages is easier and income inequality is worse

Countries that provide a range of benefits (such as unemployment, pension, disability, child support, housing support, etc) raise the income of the lowest 20% of the population, resulting in more equal distribution

Progressive tax systems allow all income earners to contribute to public revenue according to their ability

Decreasing taxes on the lower end and increasing it on the upper end would mean that the system is more progressive and there would be a more equal distribution of income

Globalisation is the economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology and finance

This integration of global economies has impacted national cultures, spread ideas, speeded up industrialisation in developing nations and led to de-industrialisation in developed nations

Countries which are more isolated will experience higher levels of wealth and income inequality

Supply-side policies such as deregulation, privatisation and trade liberalisation can provide great opportunities but also increase inequality

E.g. Privatisation of state owned assets often allows a few people to get rich (those who buy the asset), however, the service provided by the newly privatised firm may become more expensive to access