Essay about Income Inequality : Why Do I Think It Is A Microeconomics Issue?

Essay about Income Inequality : Why Do I Think It Is A Microeconomics Issue?

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Income inequality in Taiwan
Why do I think it is a microeconomics issue?
Microeconomics is the study that focuses on understanding how consumers and producers make choices and how they interact in a particular market (Mankiw & Taylor, 2014). Income inequality refers to the differences in income between individuals or households, or between different groups, areas, or nations. It is a term used to describe an uneven distribution of household or individual income in an economy (Black, Hashimzade & Myles, 2013).
There is no strict restriction on defining whether income inequality is a microeconomics or a macroeconomics issue, because different situations will need to use different measurements and data sources, which will lead us to different conclusions. For instance, in general, children from households with lower income will have less resources to obtain good education or even better quality of life, (An example of microeconomics, the consumer with lower income will have less money to spend in an economy) it makes them become less qualified than others this may be the cause of their unemployment when they grow up (Unemployment is a macroeconomic issue).
Recently income inequality has been a popular research topic for economists around the world. I have also read some articles discussing the negative effects of income inequality: in 2000 Mo claimed "income inequality penetrate into every aspect of an economy which significantly reduce the efficiency and hence the rate productivity growth", in 2010 Verme learned that income inequality could have negative, and significant effect on life satisfaction. As a Taiwanese national, I want to explore further this issue associated with Taiwan. This assignment focuses on studying the microeco...

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...ucial to raise financing for government expenditure to achieve distributional objectives through putting more national income in social welfare and the social sectors. Allocating more expenditure to the social welfare and social sectors is more effective, with more money spent on social goods and services that are most frequently used by people with lower income (Claus, Martinez-Vazquez & Vulovic, 2013).
The Taiwanese government will have to adopt a more ambitious fiscal policy along with a policy reform framework targeting to rebalance the role of the local councils and private sectors in the purpose of supporting the aging population. The long term strategy must achieve a steady and sustainable decline in expenditure commitments arising from the aging population and in the extent of the local councils’ obligations in the medical care sphere (Heller & Hauner, 2006).

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