When talking about inequality of income distributions within the society, it is inevitable to talk about how it relates to the process of economic development. About more than half a century ago, Simon Kuznets made his hypothesis on the relationship of the two and it was presented as an inverted U-shape curve—the Kuznets Curve. The pattern of the inverted U-shape intuitively indicates the timing characteristic that the inequality increases in the initial stages of development then decreases at the higher level of development. Later on the stylised fact has been formalised by numerous of studies that proving its validity and implicating in modern societies. Certainly there would be some skeptical opinions as the conjecture was based on scanty data, but the reasoning model Kuznuts built is considering an empirical regularity.
This paper forwards will examine the reasons of the pattern of the Kuznets curve by conducting Kuzenets’ (1955) explanation: in the period of economy rapidly growing, there would be a sharp difference arising between the poor and the rich which gives the incentive to the industrial productivity and eventually drive the economy to a higher level. When an economy is settled on a relative high level of development, it is clearly that most portion of population live with a relative high standard of life, or more precisely with higher incomes, briefly, the inequality should be decreasing at this stage. The next will present the empirical evidence that contribute to the formalisation of Kuznuts’ conjecture. And as well as some other factors that facilitate the relationship such as the policy structure. Afterwards, it will discuss the validity of the conjecture in more recent cases such as of which the paths of ine...
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Throughout the years, “ U.S income inequality has been increasing steadily since the 1970s and now has reached levels not seen since 1928” (Source A).
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Wealth inequality did not always exist in human life. In fact, “Human life have not only been changed, but revolutionized, within the past hundred years” (Carnegie 1). There used to be
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When it comes to sociological research, Grusky and Weisshaar give specific layers or information about the four parameters of inequality and what they mean. These factors give common over views of the category in which the unfair distribution of goods and income are spread. The four parameters are listed as the amount of inequality, rigidity, ascriptive processes, and crystallization (Grusky and Weisshaar
In the United States there are four social classes : the upper class, the middle class, the working class, and the lower class. Of these four classes the most inequality exists between the upper class and the lower class. This inequality can be seen in the incomes that the two classes earn. During the period 1979 through the present , the growth in income has disproportionately grown.The bottom sixty percent of the US population actually saw their real income decrease in 1990 dollars. The next 20% saw medium gains. The top twenty percent saw their income increase 18%. The wealthiest one percent saw their incomes rise drastically over 80%. As reported in the 1997 Center on Budget's analysis , the wealthiest one percent of Americans ( 2.6 million people) received as much after-tax income in 1994 as the bottom 35 percent of the population combined (88 million people). But in 1977 the bottom 35 percent had about twice as much after tax income as the top one percent. These statistics further show the disproportional income growth among the social classes. The gr...
Income inequality in the United States has increased and decreased throughout history, but in the recent years, the widening gap has become a serious issue. Income inequality is usually measured by Gini coefficient. According to this method coefficient varies between 0 and 100; while 0 represents complete equality (income is distributed equally among all the population of the country), 100 represents complete inequality (only one person receives all the country’s income, while the rest of the population receives nothing). According to the Census of Bureau, the official Gini coefficient in the U.S. was 46.9 in 2010. This is way higher than the all-time low coefficient of 38.6 set in 1968 (qtd. in Babones).
Income inequality in the United States, as of 2007, has reached levels not seen since 1928. In 1928, the top one percent received nearly 24% of all income within the United States (Volscho & Kelly, 2012). This percentage fell to nearly nine percent in 1975, but has risen to 23.5% as of 2007 (Volscho & Kelly, 2012). Meanwhile, in 2007 (see
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