StudentShare solutions
Triangle menu

Income Distribution - Essay Example

Extract of sample
Income Distribution

Recent years have witnessed increased polarization in income levels both among countries and among various income groups and classes within countries. Rapid and steady growth in developing countries is clearly necessary to close their income gap with the advanced industrial countries and improve standards of living. There may be some scope for raising income through reallocation of existing resources, but restoring rapid growth depends in large part on raising the rate of capital accumulation.
Experience shows that while rapid growth as such may not lead to a significant improvement in income distribution in the short to medium term, it is indispensable for attaining a more balanced pattern of distribution in the longer term. More importantly, policies can be designed so as to strengthen the forces making for greater equality while promoting growth and absorbing the surplus labor that prevails in many developing countries.
The ability of market mechanisms and locally-based initiatives to provide for the economic well-being of those persons at the low end of the income distribution is questionable. In practice, much of the concern for distributional issues is lost in the transition from an academic or policy discussion to the implementation of local economic development programs (Leigh 1995). While there is some evidence that economic growth will benefit low income workers (Bartik 1991), there is also a possibility that explicit local redistribution policies may create local comparative disadvantage (Bartik 1992).
More work is needed to understand the distributional characteristics of private markets. If greater responsibility for the economic welfare of citizens defaults to the community level, it becomes important to focus attention on income distribution at the scale of local labor markets. Further, to the extent local economic development policy can affect the activity levels of targeted production sectors, it also has an effect on distributional patterns. Thus, it becomes important to understand the implicit distributional biases of local policy in its promotion of selected economic activities, and to question whether explicit distributional objectives can be incorporated into local economic development programs.
Other important factors influencing the distribution of income are the institutional structures that organize wealth. Institutions are the entities that engage in transactions, own assets, and incur liabilities (Pyatt 1988, 1991). Conventional institutional specification is as households, enterprises, and government. Within this general framework, institutional accounts can be disaggregated in considerable variation to permit the study of policies (development strategies, tax systems, laws) that influence distributional patterns. For example, SAM research has disaggregated household accounts by landholding status (Adelman et al. 1988; Lewis and Thorbecke 1992), while other research disaggregated forest enterprises by land tenancy group (Marcouiller et al. 1995).
Thus, the process of wealth accumulation consists of two parts: the generation of income through productive activities, and its distribution to households. This ...Show more

Summary

Trends related to income inequality in the United States have received considerable attention recently. While the extent of inequality and the degree of change depend on how it is measured, there is general agreement that overall inequality in the distribution of income and wealth in the U.S…
Author : talontowne
Income Distribution essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Income Distribution"
with a personal 20% discount.
Grab the best paper

Related Essays

Poverty, Inequality and Income Distribution
Income distribution can be viewed from two different functional perspectives. The first is the functional approach and the second one is the size. The functional approach relates to the distribution of income among factors while the second one, size relates to the distribution of income among individuals.
6 pages (1500 words) Essay
Economics: Income Distribution and Poverty
In terms of individual justice or injustice, inequalities of income are easy to grasp. As agents in the workings of the national economy, however, these inequalities are far below the surface of ordinary debate. Economic distributions conjure up a wide array of problems: of meaning, measurement, explanation, and policy prescription.
8 pages (2000 words) Essay
Income Distribution: Should income inequality be reduced
This essay discusses that nowadays people have less motivation for trying to achieve perfection in their agency. As we can note, in our times it’s much harder to change your social status than it was a couple of dozens of centuries before. The society is much more rigid today due to its size and strong social stratification.
5 pages (1250 words) Essay
Income Distribution in the U.S
The income distribution is used to measure and classify the share of income within an economy. It should be noted that the method has highly been criticized as a method to show the true distribution of income within an economy. Thus when it comes to showing the
9 pages (2250 words) Essay
Trends in income distribution in the United States
These patterns of distribution are studied by various statistical means which are based on different data (Britannica, 2009). Hence as stated by Levy (2008), it is a statistical concept as no one is distributing income but rather it arises from
10 pages (2500 words) Essay
Income inequality in the UK
A higher number shows more unequal distribution of income. According to (Cribb, 2013 ) the rise in the level of income inequality in industrialized nations lead by the host of English speaking nations such as the
1 pages (250 words) Essay
Outline the causes of income inequality in the UK and evaluate the measures that could be used by the UK government to achieve a more equal distribution of wealth
A startling study on income inequality in Britain portrays the increasingly divided population in which 10% of its population is a hundred times richer as the 10% poorest in the
2 pages (500 words) Essay
Causes of income inequality in the UK and evaluate the measures that could be used by the UK government to achieve a more equal distribution of wealth
and Scott, G., 2012). Industries and job variation is the main cause of income inequality. Industries experiencing a high rate of growth including Information technology and business/ financial services,
3 pages (750 words) Essay
Income Inequality
Income may result from wages, rent, bank account interests, salaries or even profits made in business transactions ( Stiglitz, 2012). In his hypothesis, Karl Marx foresaw income inequality in a capitalistic as a
10 pages (2500 words) Essay
Income Inequality
The subject of economic disparity can incriminate ideas of equality of opportunity, equity of consequence and general equity. However,
4 pages (1000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation