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• Most Americans Say There Is Too Much Economic Inequality in the U.S., but Fewer Than Half Call It a Top Priority
• 1. Trends in income and wealth inequality

Table of Contents

• 2. Views of economic inequality
• 3. What Americans see as contributors to economic inequality
• 4. Views on reducing economic inequality
• Acknowledgments
• Methodology

Barely 10 years past the end of the Great Recession in 2009, the U.S. economy is doing well on several fronts . The labor market is on a job-creating streak that has rung up more than 110 months straight of employment growth, a record for the post-World War II era. The unemployment rate in November 2019 was 3.5%, a level not seen since the 1960s. Gains on the jobs front are also reflected in household incomes, which have rebounded in recent years.

But not all economic indicators appear promising. Household incomes have grown only modestly in this century, and household wealth has not returned to its pre-recession level. Economic inequality, whether measured through the gaps in income or wealth between richer and poorer households, continues to widen.

Household incomes are growing again after a lengthy period of stagnation

With periodic interruptions due to business cycle peaks and troughs, the incomes of American households overall have trended up since 1970. In 2018, the median income of U.S. households stood at $74,600. 5 This was 49% higher than its level in 1970, when the median income was $50,200. 6 (Incomes are expressed in 2018 dollars.)

But the overall trend masks two distinct episodes in the evolution of household incomes (the first lasting from 1970 to 2000 and the second from 2000 to 2018) and in how the gains were distributed.

Most of the increase in household income was achieved in the period from 1970 to 2000. In these three decades, the median income increased by 41%, to $70,800, at an annual average rate of 1.2%. From 2000 to 2018, the growth in household income slowed to an annual average rate of only 0.3%. If there had been no such slowdown and incomes had continued to increase in this century at the same rate as from 1970 to 2000, the current median U.S. household income would be about $87,000, considerably higher than its actual level of $74,600.

The shortfall in household income is attributable in part to two recessions since 2000. The first recession, lasting from March 2001 to November 2001, was relatively short-lived. 7  Yet household incomes were slow to recover from the 2001 recession and it was not until 2007 that the median income was restored to about its level in 2000.

But 2007 also marked the onset of the Great Recession, and that delivered another blow to household incomes. This time it took until 2015 for incomes to approach their pre-recession level. Indeed, the median household income in 2015 – $70,200 – was no higher than its level in 2000, marking a 15-year period of stagnation, an episode of unprecedented duration in the past five decades. 8

More recent trends in household income suggest that the effects of the Great Recession may finally be in the past. From 2015 to 2018, the median U.S. household income increased from $70,200 to $74,600, at an annual average rate of 2.1%. This is substantially greater than the average rate of growth from 1970 to 2000 and more in line with the economic expansion in the 1980s and the dot-com bubble era of the late 1990s.

Why economic inequality matters

The rise in economic inequality in the U.S. is tied to several factors. These include , in no particular order, technological change, globalization, the decline of unions and the eroding value of the minimum wage. Whatever the causes, the uninterrupted increase in inequality since 1980 has caused concern among members of the public , researchers , policymakers and politicians .

One reason for the concern is that people in the lower rungs of the economic ladder may experience diminished economic opportunity and mobility in the face of rising inequality, a phenomenon referred to as The Great Gatsby Curve . Others have highlighted inequality’s negative impact on the political influence of the disadvantaged, on geographic segregation by income, and on economic growth itself. The matter may not be entirely settled, however, as an opposing viewpoint suggests that income inequality does not harm economic opportunity.

Alternative estimates of economic inequality

This report presents estimates of income inequality based on household income as estimated in the Current Population Survey (CPS), a survey of households conducted by the U.S. Census Bureau in partnership with the Bureau of Labor Statistics. These estimates refer to gross (pretax) income and encompass most sources of income. A key omission is the value of in-kind services received from government sources. Because income taxes are progressive and in-kind services also serve to boost the economic wellbeing of (poorer) recipients, not accounting for these two factors could overstate the true gap in the financial resources of poorer and richer households.

The Congressional Budget Office (CBO) offers an alternative estimate of income inequality that accounts for federal taxes and a more comprehensive array of cash transfers and in-kind services than is possible with Current Population Survey data. The CBO finds that the Gini coefficient in the U.S. in 2016 ranged from 0.595, before accounting for any forms of taxes and transfers, to 0.423, after a full accounting of taxes and transfers. These estimates bracket the Census Bureau’s estimate of 0.481 for the Gini coefficient in 2016. By either estimate, income inequality in the U.S. is found to have increased by about 20% from 1980 to 2016 (The Gini coefficient ranges from 0 to 1, or from perfect equality to complete inequality). Findings from other researchers show the same general rise in inequality over this period regardless of accounting for in-kind transfers.

Yet another alternative is to focus on inequality in consumption, which implicitly accounts for all forms and sources of incomes, taxes and transfers. Some estimates based on consumption show that inequality in the U.S. increased by less than implied by estimates based on income, but other estimates suggest the trends based on consumption and income are similar. Empirically, consumption can be harder to measure than income.

Upper-income households have seen more rapid growth in income in recent decades

The growth in income in recent decades has tilted to upper-income households. At the same time, the U.S. middle class , which once comprised the clear majority of Americans, is shrinking. Thus, a greater share of the nation’s aggregate income is now going to upper-income households and the share going to middle- and lower-income households is falling. 9

The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly but surely since 1971, with each decade thereafter typically ending with a smaller share of adults living in middle-income households than at the beginning of the decade.

The decline in the middle-class share is not a total sign of regression. From 1971 to 2019, the share of adults in the upper-income tier increased from 14% to 20%. Meanwhile, the share in the lower-income tier increased from 25% to 29%. On balance, there was more movement up the income ladder than down the income ladder.

But middle-class incomes have not grown at the rate of upper-tier incomes. From 1970 to 2018, the median middle-class income increased from $58,100 to $86,600, a gain of 49%. 10  This was considerably less than the 64% increase for upper-income households, whose median income increased from $126,100 in 1970 to $207,400 in 2018. Households in the lower-income tier experienced a gain of 43%, from $20,000 in 1970 to $28,700 in 2018. (Incomes are expressed in 2018 dollars.)

More tepid growth in the income of middle-class households and the reduction in the share of households in the middle-income tier led to a steep fall in the share of U.S. aggregate income held by the middle class. From 1970 to 2018, the share of aggregate income going to middle-class households fell from 62% to 43%. Over the same period, the share held by upper-income households increased from 29% to 48%. The share flowing to lower-income households inched down from 10% in 1970 to 9% in 2018.

These trends in income reflect the growth in economic inequality overall in the U.S. in the decades since 1980.

Income growth has been most rapid for the top 5% of families

Even among higher-income families, the growth in income has favored those at the top. Since 1980, incomes have increased faster for the most affluent families – those in the top 5% – than for families in the income strata below them. This disparity in outcomes is less pronounced in the wake of the Great Recession but shows no signs of reversing.

From 1981 to 1990, the change in mean family income ranged from a loss of 0.1% annually for families in the lowest quintile (the bottom 20% of earners) to a gain of 2.1% annually for families in the highest quintile (the top 20%). The top 5% of families, who are part of the highest quintile, fared even better – their income increased at the rate of 3.2% annually from 1981 to 1990. Thus, the 1980s marked the beginning of a long and steady rise in income inequality.

A similar pattern prevailed in the 1990s, with even sharper growth in income at the top. From 1991 to 2000, the mean income of the top 5% of families grew at an annual average rate of 4.1%, compared with 2.7% for families in the highest quintile overall, and about 1% or barely more for other families.

The period from 2001 to 2010 is unique in the post-WWII era. Families in all strata experienced a loss in income in this decade, with those in the poorer strata experiencing more pronounced losses. The pattern in income growth from 2011 to 2018 is more balanced than the previous three decades, with gains more broadly shared across poorer and better-off families. Nonetheless, income growth remains tilted to the top, with families in the top 5% experiencing greater gains than other families since 2011.

The wealth of American families is currently no higher than its level two decades ago

Other than income, the wealth of a family is a key indicator of its financial security. Wealth, or net worth, is the value of assets owned by a family, such as a home or a savings account, minus outstanding debt, such as a mortgage or student loan. Accumulated over time, wealth is a source of retirement income, protects against short-term economic shocks, and provides security and social status for future generations.

The period from the mid-1990s to the mid-2000s was beneficial for the wealth portfolios of American families overall. Housing prices more than doubled in this period, and stock values tripled. 11 As a result, the median net worth of American families climbed from $94,700 in 1995 to $146,600 in 2007, a gain of 55%. 12  (Figures are expressed in 2018 dollars.)

But the run up in housing prices proved to be a bubble that burst in 2006. Home prices plunged starting in 2006, triggering the Great Recession in 2007 and dragging stock prices into a steep fall as well. Consequently, the median net worth of families fell to $87,800 by 2013, a loss of 40% from the peak in 2007. As of 2016, the latest year for which data are available, the typical American family had a net worth of $101,800, still less than what it held in 1998.

The wealth divide among upper-income families and middle- and lower-income families is sharp and rising

The wealth gap among upper-income families and middle- and lower-income families is sharper than the income gap and is growing more rapidly.

The period from 1983 to 2001 was relatively prosperous for families in all income tiers, but one of rising inequality. The median wealth of middle-income families increased from $102,000 in 1983 to $144,600 in 2001, a gain of 42%. The net worth of lower-income families increased from $12,3oo in 1983 to $20,600 in 2001, up 67%. Even so, the gains for both lower- and middle-income families were outdistanced by upper-income families, whose median wealth increased by 85% over the same period, from $344,100 in 1983 to $636,000 in 2001. (Figures are expressed in 2018 dollars.)

The wealth gap between upper-income and lower- and middle-income families has grown wider this century. Upper-income families were the only income tier able to build on their wealth from 2001 to 2016, adding 33% at the median. On the other hand, middle-income families saw their median net worth shrink by 20% and lower-income families experienced a loss of 45%. As of 2016, upper-income families had 7.4 times as much wealth as middle-income families and 75 times as much wealth as lower-income families. These ratios are up from 3.4 and 28 in 1983, respectively.

The reason for this is that middle-income families are more dependent on home equity as a source of wealth than upper-income families, and the bursting of the housing bubble in 2006 had more of an impact on their net worth. Upper-income families, who derive a larger share of their wealth from financial market assets and business equity, were in a better position to benefit from a relatively quick recovery in the stock market once the recession ended.

As with the distribution of aggregate income, the share of U.S. aggregate wealth held by upper-income families is on the rise. From 1983 to 2016, the share of aggregate wealth going to upper-income families increased from 60% to 79%. Meanwhile, the share held by middle-income families has been cut nearly in half, falling from 32% to 17%. Lower-income families had only 4% of aggregate wealth in 2016, down from 7% in 1983.

The richest are getting richer faster

The richest families in the U.S. have experienced greater gains in wealth than other families in recent decades, a trend that reinforces the growing concentration of financial resources at the top.

The tilt to the top was most acute in the period from 1998 to 2007. In that period, the median net worth of the richest 5% of U.S. families increased from $2.5 million to $4.6 million, a gain of 88%.

This was nearly double the 45% increase in the wealth of the top 20% of families overall, a group that includes the richest 5%. Meanwhile, the net worth of families in the second quintile, one tier above the poorest 20%, increased by only 16%, from $27,700 in 1998 to $32,100 in 2007. (Figures are expressed in 2018 dollars.)

The wealthiest families are also the only ones to have experienced gains in wealth in the years after the start of the Great Recession in 2007. From 2007 to 2016, the median net worth of the richest 20% increased 13%, to $1.2 million. For the top 5%, it increased by 4%, to $4.8 million. In contrast, the net worth of families in lower tiers of wealth decreased by at least 20% from 2007 to 2016. The greatest loss – 39% – was experienced by the families in the second quintile of wealth, whose wealth fell from $32,100 in 2007 to $19,500 in 2016.

As a result, the wealth gap between America’s richest and poorer families more than doubled from 1989 to 2016. In 1989, the richest 5% of families had 114 times as much wealth as families in the second quintile, $2.3 million compared with $20,300. By 2016, this ratio had increased to 248, a much sharper rise than the widening gap in income. 13

Income inequality in the U.S has increased since 1980 and is greater than in peer countries

Income inequality may be measured in a number of ways , but no matter the measure , economic inequality in the U.S. is seen to be on the rise.

One widely used measure – the 90/10 ratio – takes the ratio of the income needed to rank among the top 10% of earners in the U.S. (the 90th percentile) to the income at the threshold of the bottom 10% of earners (the 10th percentile). In 1980, the 90/10 ratio in the U.S. stood at 9.1, meaning that households at the top had incomes about nine times the incomes of households at the bottom. The ratio increased in every decade since 1980, reaching 12.6 in 2018, an increase of 39%. 14

Not only is income inequality rising in the U.S., it is higher than in other advanced economies. Comparisons of income inequality across countries are often based on the Gini coefficient , another commonly used measure of inequality. 15 Ranging from 0 to 1, or from perfect equality to complete inequality, the Gini coefficient in the U.S. stood at 0.434 in 2017, according to the Organization for Economic Cooperation and Development (OECD). 16  This was higher than in any other of the G-7 countries , in which the Gini ranged from 0.326 in France to 0.392 in the UK, and inching closer to the level of inequality observed in India (0.495). More globally, the Gini coefficient of inequality ranges from lows of about 0.25 in Eastern European countries to highs in the range of 0.5 to 0.6 in countries in southern Africa, according to World Bank estimates .

• The median income splits the income distribution into two halves – half the households earn less than the median and half the households earn more. Incomes are adjusted for household size and scaled to represent a household size of three. See methodology for details. ↩
• Percentage changes are estimated, and other calculations are made, before numbers are rounded. ↩
• The recession dates are as designated by the National Bureau of Economic Research . ↩
• It is likely that household incomes did not return to their 2000 level till 2016 or later. A redesign of income questions by the Census Bureau in 2014 is estimated to have given a boost of about 3% to median household income in the U.S. at the time of the redesign. ↩
• Middle-income” Americans are adults whose annual household income is two-thirds to double the national median, after incomes have been adjusted for household size. Lower-income households have incomes less than 67% of the median and upper-income households have incomes that are more than double the median. See methodology for details. Previous Pew Research Center reports have examined the state of the American middle class in greater detail, including trends within U.S. metropolitan areas. ↩
• The data source for these estimates is the Current Population Survey, Annual Social and Economic Supplement for 1971 to 2019. In the survey, respondents provide household income data for the previous calendar year. Thus, income data in this section refer to the 1970-2018 period and the counts of people from the same survey refer to the 1971-2019 period. ↩
• The S&P/Case-Shiller U.S. National Home Price Index increased from 80 in January 1995 to 185 in June 2006 (January 2000=100). It fell to 134 in February 2012 and climbed thereafter, reaching 212 in August 2019. At the start of the Great Recession in December 2007, the S&P 500 index stood at about 1,500, three times its level of about 500 in 1995. After the peak in 2007, the S&P 500 fell below 1,000 in 2009. As of November 2019, the index had reached a level of about 3,000. (S&P 500 historical values downloaded from Yahoo! on Nov. 21, 2019.) ↩
• Estimates of wealth are from the Survey of Consumer Finances (SCF). The SCF is conducted triennially by the Federal Reserve Board of Governors. It was first fielded in 1983 and the latest survey for which data are available was in 2016. ↩
• It is not possible to compute the ratio of the wealth of the top 5% of families to the wealth of the poorest 20% because the median wealth of the poorest families is either zero or negative in most years examined. ↩
• Per the U.S. Census Bureau , the source of these estimates, the 90th percentile household income in 2018 was $184,292 and the 10th percentile household income was $14,629 (incomes not adjusted for household size). ↩
• The Gini coefficient encapsulates the share of aggregate income held by each person or household. If everyone has the same income, or the same share of aggregate income, the Gini coefficient equals zero. If the income distribution is perfectly unequal, a single person or household holds all aggregate income, the Gini coefficient is equal to one. ↩
• The OECD is a group of 36 countries, including many of the world’s advanced economies. The OECD’s estimates of the Gini coefficient are for the following years: U.S. – 2017, UK – 2017, Italy – 2016, Japan – 2015, Canada – 2017, Germany – 2016, France – 2016, and India – 2011. ↩

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Causes and Consequences of Income Inequality – An Overview

Rising income inequality is one of the greatest challenges facing advanced economies today. Income inequality is multifaceted and is not the inevitable outcome of irresistible structural forces such as globalisation or technological development. Instead, this review shows that inequality has largely been driven by a multitude of political choices. The embrace of neoliberalism since the 1980s has provided the key catalyst for political and policy changes in the realms of union regulation, executive pay, the welfare state and tax progressivity, which have been the key drivers of inequality. These preventable causes have led to demonstrable harmful outcomes that are not explicable solely by material deprivation. This review also shows that inequality has been linked on the economic front with reduced growth, investment and innovation, and on the social front with reduced health and social mobility, and greater violent crime.

1 Introduction

Income inequality has recently come to be viewed as one of the greatest challenges facing the world today. In recent years, the topic has dominated the agenda of the World Economic Forum (WEF), where the world’s top political and business leaders attend. Their global risks report, drawn from over 700 experts in attendance, pronounced inequality to be the greatest threat to the world economy in 2017 ( Elliott 2017 ). Likewise, the past decade has seen leading global figures such as former American President Barack Obama, Pope Francis, Chinese President Xi Jinping, and the former head of the International Monetary Fund (IMF), Christine Lagarde, all undertake speeches on the gravity of income inequality and the need to address its rise. This is because, as this research note shows, income inequality engenders harmful consequences that are not explicable solely by material deprivation.

The general dynamics of income inequality include a tendency to rise slowly and fluctuate over time. For instance, Japan had one of the highest rates in the world prior to the Second World War and the United States (US) one of the lowest, which has since completely reversed for both. The United Kingdom (UK) was also the second most equitable large European country in the 1970s but is now the most inequitable ( Dorling 2018 : 27–28).

High rates of inequality are rarely sustained for long periods because they tend to lead to or become punctuated by man-made disasters that lead to a levelling out. Scheidel (2017) posits that there in fact exists a violent ‘Four Horseman of Leveling’ (mass mobilisation warfare, transformation revolutions, state collapse, and lethal pandemics) for inequality, which have at times dramatically reduced inequalities because they can lead to the alteration of existing power structures or wipe out the wealth of elites and redistribute their resources. For instance, the pronounced shocks of the two world wars led to the ‘Great Compression’ of income throughout the West in the post-war years. There is already some evidence that the current global pandemic caused by the novel Coronavirus, has led to greater aversion to income inequality ( Asaria, Costa-Font, and Cowell 2021 ; Wiwad et al. 2021 ).

Thus, greater aversion to inequality has been able to reduce inequality in the past, this is because, as this review also shows, income inequality does not result exclusively from efficient market forces but arises out of a set of rules that is shaped by those with political power. Inequality’s rise is not inevitable, nor beyond the control of governments and policymakers, as they can affect distributional outcomes and inequality through public policy.

It is the purpose of this review to outline the causes and consequences of income inequality. The paper begins with an analysis of the key structural and institutional determinants of inequality, followed by an examination into the harmful outcomes of inequality. It then concludes with a discussion of what policymakers can do to arrest the rise of inequality.

2 Causes of Income Inequality

Broadly speaking, explanations for the increase in income inequality have largely been classified as either structural or institutional. Historically, economists emphasised structural causes of increasing income inequality, with globalisation and technological change at the forefront. However, in recent years opinion has shifted to emphasise more institutional political factors to do with the adoption of neoliberal reforms such as privatisation, deregulation and tax and welfare reductions since the early 1980s. They were first embraced and most heavily championed by the UK and US, spreading globally later, and which provide the crucial catalysts of rising income inequality ( Atkinson 2015 ; Brown 2017 ; Piketty 2020 ; Stiglitz 2013 ). I discuss each of these key factors in turn.

2.1 Globalisation

One of the earliest, and most prominent explanations for the rise of income inequality emphasised the role of globalisation ( Borjas, Freeman, and Katz 1992 ; Revenga 1992 ). Globalisation has led to the offshoring of many goods and services that used to be produced or completed domestically in the West, which has created downward pressures on the wages of lower skilled workers. According to the ‘market forces hypothesis,’ increasing inequality is a response to the rising demand for skills at the top, in which the spread of globalisation and technological progress have been facilitated through reduced barriers to trade and movement.

Proponents of globalisation as the leading cause of inequality have argued that globalisation has constrained domestic state choices and left governments collectively powerless to address inequality. Detractors admit that globalisation has indeed had deep structural effects on Western economies but its impact on the degree of agency available to domestic governments has been mediated by individual policy choices ( Thomas 2016 : 346). A key problem with attributing the cause of inequality to globalisation, is that the extent of the inequality increase has varied considerably across countries, even though they have all been exposed to the same effects of globalisation. The US also has the highest inequality amongst rich countries, but it is less reliant on international trade than most other developed countries ( Brown 2017 : 56). Moreover, a recent meta-analysis by Heimberger (2020) found that globalisation has a “small-to-moderate” inequality-increasing effect, with financial globalisation displaying the largest impact.

2.2 Technology

A related explanation for inequality draws attention to the impact of technology specifically. The advent of the digital age has placed a higher premium on the skills needed for non-routine work and reduced the value placed on lower skilled routine work, as it has enabled machines to replace jobs that could be routinised. This skill-biased technological change (SBTC) has led to major changes in the organisation of work, as many full-time permanent jobs with benefits have given way to part-time flexible work without benefits, that are often centred around the completion of short ‘gigs’ such as a car journey or food delivery. For instance, the Organisation for Economic Co-operation and Development (OECD) estimated in 2015 that since the 1990s, roughly 60% of all job creation has been in the form of non-standard work due to technological changes and that those employed in such jobs are more likely to be poor ( Brown 2017 : 60).

Relatedly, a prevailing doctrine in economics is ‘marginal productivity theory,’ which holds that people with greater productivity levels will earn higher incomes. This is due to the belief that a person’s productivity is equated to their societal contribution ( Stiglitz 2013 : 37). Since technology is a leading determinant in the productivity of different skills and SBTC has led to increased productivity, it has also become a justification for inequality. However, it is very difficult to separate any one person’s contribution to society from that of others, as even the most successful businessperson owes their success to the rule of law, good infrastructure, and a state educated workforce ( Stiglitz 2013 : 97–98).

Further criticisms of the SBTC explanation, are that there was still substantial SBTC when inequality first fell dramatically and then stabilised in the period from 1930 to 1980, and it has failed to explain the perpetuation of both the gender and racial wage gap, “or the dramatic rise in education-related wage gaps for younger versus older workers” ( Brown 2017 : 67). Although it is difficult to decouple globalisation and technology, as they each have compounding tendencies, it is most likely that globalisation and technology are important explanatory factors for inequality, but predominantly facilitate and underlie the following more determinant institutional factors that happen to be already present, such as reduced tax progressivity, rising executive pay, and union decline. It is to these factors that I now turn.

2.3 Tax Policy

Taxes overwhelmingly comprise the primary source of revenue that governments can use for redistribution, which is fundamental to alleviating income inequality. Redistribution is defended on economic grounds because the marginal utility of money declines as income rises, meaning that the benefit derived from extra income is much higher for the poor than the rich. However, since the late 1970s, a major rethinking surrounding redistributive policy occurred. This precipitated ‘trickle-down economics’ theory achieving prominence amongst American and British policymakers, whereby the benefits from tax cuts on the wealthy would trickle-down to everyone. Subsequently, expert opinion has determined that tax cuts do not actually spur economic growth ( CBPP 2017 ).

Personal income tax progressivity has declined sharply in the West, as the average top income tax rate for OECD members fell from 62% in 1981 to 35% in 2015 ( IMF 2017 : 11). However, the decline has been most pronounced in the UK and the US, which had top rates of around 90% in the 1960s and 1970s. Corporate tax rates have also plummeted by roughly one half across the OECD since 1980 ( Shaxson 2015 : 4). Recent International Monetary Fund (IMF) research found that between 1985 and 1995, redistribution through the tax system had offset 60% of the increase in market inequality but has since failed to respond to the continuing increase in inequality ( IMF 2017 ). Moreover, in a sample of 18 OECD countries encompassing 50 years, Hope and Limberg (2020) found that tax reforms even significantly increased pre-tax income inequality, while having no significant effect on economic growth.

This decline in tax progressivity has been a leading cause of rising income inequality, which has been compounded by the growing problem of tax avoidance. A complex global web of shell corporations has been constructed by international brokers in offshore tax havens that is able to keep wealth hidden from tax collectors. The total hidden amount in tax havens is estimated to be $7.6 trillion US dollars and rising, or roughly 8% of total global household wealth ( Zucman 2015 : 36). Recent research has revealed that tax havens are overwhelmingly used by the immensely rich ( Alstadsæter, Johannesen, and Zucman 2019 ), thus taxing this wealth would substantially reduce income inequality and increase revenue available for redistribution. The massive reduction in income tax progressivity in the Anglo world, after it had been amongst its leaders in the post-war years, also “probably explains much of the increase in the very highest earned incomes” since 1980 ( Piketty 2014 : 495–496).

2.4 Executive Pay

The enormous rising pay of executives since the 1980s, has also fuelled income inequality and more specifically the gap between executives and their employees. For example, the gap between Chief Executive Officers (CEO) and their workers at the 500 leading US companies in 2016, was 335 times, which is nearly 10 times larger than in 1980. It is a similar story in the UK, with a pay ratio of 131 for large British firms, which has also risen markedly since 1980 ( Dorling 2017 ).

Piketty (2014 : 335) posits that the dramatic reduction in top income tax has had an amplifying effect on top executives pay since it provides them with much greater incentive to seek larger remuneration, as far less is then taken in tax. It is difficult to objectively measure an individual’s contribution to a company and with the onset of trickle-down economics and accompanying business-friendly climate since the 1980s, top executives have found it relatively easy to convince boards of their monetary worth ( Gabaix and Landier 2008 ).

The rise in executive pay in both the UK and US, is far larger than the rest of the OECD. This may partially be explained by the English-speaking ‘superstar’ theory, whereby the global market demand for top CEOs is much higher for native English speakers due to English being the prime language of the global economy ( Deaton 2013 : 210). Saez and Veall (2005) provide support for the theory in a study of the top 1% of earners from the Canadian province of Quebec, which showed that English speakers were able to increase their income share over twice as much as their French-speaking counterparts from 1980 to 2000. This upsurge of income at the top of the labour market has been accompanied by stagnation or diminishing returns for the middle and lower parts of the labour market, which has been affected by the dramatic decline of union influence throughout the West.

2.5 Union Decline

Trade unions have typically been viewed as an important force for moderating income inequality. They “contribute to wage compression by restricting wage decline among low-wage earners” and restrain wage surges among high-wage earners ( Checchi and Visser 2009 : 249). The mere presence of unions can also drive up the wages of non-union employees in similar industries, as employers tend to give in to wage demands to keep unions out. Union density has also been proven to be strongly associated with higher redistribution both directly and indirectly, through its influence on left party governments ( Haddow 2013 : 403).

There had broadly existed a ‘social contract’ between labour and business, whereby collective bargaining establishes a wage structure in many industries. However, this contract was abandoned by corporate America in the mid-1970s when large-scale corporate donations influenced policymakers to oppose pro-union reform of labour law, leading to political defeats for unions ( Hacker and Pierson 2010 : 58–59). The crackdown of strikes culminating in the momentous Air Traffic Controllers’ strike (1981) in the US and coal miner’s strike (1984–85) in the UK, caused labour to become de-politicised, which was self-reinforcing, because as their political power dispersed, policymakers had fewer incentives to protect or strengthen union regulations ( Rosenfeld and Western 2011 ). Consequently, US union density has plummeted from around a third of the workforce in 1960, down to 11.9% last decade, with the steepest decline occurring in the 1980s ( Stiglitz 2013 : 81).

Although the decline in union density is not as steep cross-nationally, the pattern is still similar. Baccaro and Howell (2011 : 529) found that on average the unionisation rate decreased by 0.39% a year since 1974 for the 15 OECD members they surveyed. Increasingly, the decline in the fortunes of labour is being linked with the increase in inequality and the sharpest increases in income inequality have occurred in the two countries with the largest falls in union density – the UK and US. Recent studies have found that the weakening of organised unions accounts for between a third and a fifth of the total rise in income inequality in the US ( Rosenfeld and Western 2011 ), and nearly one half of the increase in both the Gini rate and the top 10%’s income share amongst OECD members ( Jaumotte and Buitron 2015 ).

To illustrate the changing relationship between inequality and unionisation, Figure 1 displays a local polynomial smoother scatter plot of union density by income inequality, for 23 OECD countries, 1980–2018. They are negatively correlated, as countries with higher union density have much lower levels of income inequality. Figure 2 further plots the time trends of both. Income inequality (as measured via the Gini coefficient) has climbed over 0.02 percentage points on average in these countries since 1980, which is roughly a one-tenth rise. Whereas union density has fallen on average from 44 to 35 percentage points, which is over one-fifth.

Gini coefficient by union density, OECD 1980–2018. Data on Gini coefficients from SWIID ( Solt 2020 ); data on union density from ICTWSS Database ( Visser 2019 ).

Gini coefficient by union density, 1980–2018. Data on Gini coefficients from SWIID ( Solt 2020 ); data on union density from ICTWSS Database ( Visser 2019 ).

In sum, income inequality is multifaceted and is not the inevitable outcome of irresistible structural forces such as globalisation or technological development. Instead, it has largely been driven by a multitude of political choices. Tridico (2018) finds that the increases in inequality from 1990 to 2013 in 26 OECD countries, was largely owing to increased financialisation, deepening labour flexibility, the weakening of trade unions and welfare state retrenchment. While Huber, Huo, and Stephens (2019) recently reveals that top income shares are unrelated to economic growth and knowledge-intensive production but is closely related to political and policy changes surrounding union density, government partisanship, top income tax rates, and educational investment. Lastly, Hager’s (2020) recent meta-analysis concludes that the “empirical record consistently shows that government policy plays a pivotal role” in shaping income inequality.

These preventable causes that have given rise to inequality have created socio-economic challenges, due to the demonstrably negative outcomes that inequality engenders. What follows is a detailed analysis of the significant mechanisms that income inequality induces, which lead to harmful outcomes.

3 Consequences of Income Inequality

Escalating income inequality has been linked with numerous negative outcomes. On the economic front, negative results transpire beyond the obvious poverty and material deprivation that is often associated with low incomes. Income inequality has also been shown to reduce growth, innovation, and investment. On the social front, Wilkinson and Pickett’s ground-breaking The Spirit Level ( 2009 ), found that societies that are more unequal have worse social outcomes on average than more egalitarian societies. They summarised an extensive body of research from the previous 30 years to create an Index of Health and Social Problems, which revealed a host of different health and social problems (measuring life expectancy, infant mortality, obesity, trust, imprisonment, homicide, drug abuse, mental health, social mobility, childhood education, and teenage pregnancy) as being positively correlated with the level of income inequality across rich nations and across states within the US. Figure 3 displays the cross-national findings via a sample of 21 OECD countries.

Index of health and social problems by Gini coefficient. Data on health and social problems index from The Equality Trust (2018) ; data on Gini coefficients from OECD (2020) .

3.1 Economic

Income inequality is predominantly an economic subject. Therefore, it is understandable that it can engender pervasive economic outcomes. Foremost economically speaking, it has been linked with reduced growth, investment and innovation. Leading international organisations such as the IMF, World Bank and OECD, pushed for neoliberal reforms beginning in the 1980s, although they have recently started to substantially temper their views due to their own research into inequality. A 2016 study by IMF economists, noted that neoliberal policies have delivered benefits through the expansion of global trade and transfers of technology, but the resulting increases in inequality “itself undercut growth, the very thing that the neo-liberal agenda is intent on boosting” ( Ostry, Loungani, and Furceri 2016 : 41). Cingano’s (2014) OECD cross-national study, found that once a country’s income inequality reaches a certain level it reduces growth. The growth rate in these countries would have been one-fifth higher had income inequality not increased, while the greater equality of the other countries included in the study helped to increase their growth rates.

Consumer spending is good for economic growth but rising income inequality shifts more money to the top of the income distribution, where higher income individuals have a much smaller propensity to consume than lower-income individuals. The wealthy save roughly 15–25% of their income, whereas low income individuals spend their entire income on consumer goods and services ( Stiglitz 2013 : 106). Therefore, greater inequality reduces demand in an economy and is a major contributor to the ‘secular stagnation’ (persistent insufficient demand relative to aggregate private savings) that the largest Western economies have been experiencing since the financial crisis. Inequality also increases the level of debt, as lower-income individuals borrow more to maintain their standard of living, especially in a climate of low interest rates. Combined with deregulation, greater debt increases instability and “was a major contributor to, if not the underlying cause of, the 2008 financial crash” ( Brown 2017 : 35–36).

Another key economic effect of income inequality is that it leads to reduced welfare spending and public investment. Since a greater share of the income distribution is earned by the very wealthy, governments have less income available to fund education, public amenities, and other services that the poor rely heavily on. This creates social separation, whereby the wealthy opt out in publicly funding services because their private equivalents are of better quality. This causes a cycle of increasing income inequality that is likely to eventually lead to a situation of “private affluence and public squalor” ( Marmot 2015 : 39).

Lastly, it has been proven that economic instability is a by-product of increasing inequality, which harms innovation. Both countries and American states with the highest inequality have been found to be the least innovative in terms of the amount of Intellectual Property (IP) patents they produce ( Dorling 2018 : 129–130). Although income inequality is predominantly an economic subject, its effects are so pervasive that it has also been linked to a host of negative health and societal outcomes.

Wilkinson and Pickett found key associations between income inequality for both physical and mental health. For example, they discovered that on average the life expectancy gap is more than four years between the least and most equitable richest nations (Japan and the US). Since their revelations, overall life expectancy has been reported to be declining in the US ( Case and Deaton 2020 ). It has held or declined every year since 2014, which has led to a cumulative drop of 1.13 years ( Andrasfay and Goldman 2021 ). Marmot (2015) has provided evidence that there exists a social gradient whereby differences in affluence translate into increasing health inequalities, which can be shown even down to the neighbourhood level, as more affluent areas have higher life expectancy on average than deprived areas, and a clear gradient appears where life expectancy increases in line with affluence.

Moreover, Marmot’s famous Whitehall studies, which are large-scale longitudinal studies of Whitehall employees of UK central government, found an inverse-relationship between salary grade and ill-health, whereby low-grade workers were four times as likely as high-grade workers to suffer from ill-health ( 2015 : 11). Health steadily improves with rank and the correlation is little affected by lifestyle controls such as tobacco and alcohol usage. However, the leading factor that seems to make the most difference in ill-health is job stress and a person’s sense of control over their work, including the variety of work and the use and development of skills ( Schrecker and Bambra 2015 : 54–55).

‘Psychosocial stresses,’ like those appearing in the Whitehall studies, have been found to be more common and frequent amongst low-income individuals, beyond just the workplace ( Jensen and van Kersbergen 2017 : 24). Wilkinson and Pickett (2019) posit that greater income inequality engenders low self-esteem, chronic stress and depression, stemming from status anxiety. This occurs because more importance is placed on where people fit in a hierarchy with greater inequality. For evidence, they outline a clear relationship of a much higher percentage of the population suffering from mental illness in more unequal countries. Meticulous research has shown that huge inequalities in income result in the poor having feelings of shame across a range of environments. Furthermore, Dickerson and Kemeny’s (2004) meta-analysis of 208 studies found that stress-hormone (cortisol) levels were raised particularly “when people felt that others were making negative judgements about them” ( Rowlingson 2011 : 24).

These effects on both mental and physical health can be best illustrated via the ‘absolute income’ and ‘relative income’ hypotheses ( Daly, Boyce, and Wood 2015 ). The relative income hypothesis posits that when an individual’s income is held constant, the relative income of others can affect a person’s health depending on how they view themselves in comparison to those above them ( Wilkinson 1996 ). This pattern also holds when income inequality increases at the societal level, because if such changes lead to increases in chronic stress, it can increase ill-health nationally. Whereas the absolute income hypothesis predicts that health gains from an extra unit of income diminish as an individual’s income rises ( Kawachi, Adler, and Dow 2010 ). A mean preserving transfer from a richer to poorer individual raises the health of the poorer individual more than it lowers the health of the richer person. This occurs because there is an optimum threshold of income required to maintain good health. Thus, when holding total income constant, a more equal distribution of income should improve overall population health. This pattern also applies at the country-wide level, as the “effect of income on health appears substantial as countries move from about $15,000 to 25,000 US dollars per capita,” but appears non-existent beyond that point ( Leigh, Jencks, and Smeeding 2009 : 386–387).

Income inequality also impacts happiness and wellbeing, as the happiest nations are routinely the ones with low inequality, such as Denmark and Norway. Happiness has been proven to be affected by the law of diminishing returns in economics. It states that higher income incrementally improves happiness but only up to a certain point, as any individual income earned beyond roughly $70,000 US dollars, does not bring about greater happiness ( Deaton 2013 : 53). The negative physical and mental health outcomes that income inequality provoke, also impact key societal areas such as crime, social mobility and education.

Rates of violent crime are lower in more equal countries ( Hsieh and Pugh 1993 ; Whitworth 2012 ). This is largely because more equal countries have less poverty, which leads to less people being desperate about their situation, as lower-income individuals have been shown to commit more crime. Relatedly, according to strain theory, more unequal societies place higher social value in achieving economic success, while providing lower means to achieve it ( Merton 1938 ). This generates strain, which may lead more individuals to pursue crime as a means of attaining financial success. At the opposite end of the income spectrum, the wealthy in more equal countries are also less likely to exploit others and commit fraud or exhibit other anti-social behaviour, partly because they feel less of a need to cut corners to get ahead, or to make money ( Dorling 2017 : 152–153). Homicides also tend to rise with inequality. Daly (2016) reveals that inequality predicts homicide rates better than any other variable and accounts for around half of the variance in murder rates between countries and American states. Roughly 90% of American homicides are committed by men, and since the majority of homicides occur over status, inequality raises the stakes of disputes over status amongst men.

Studies have also shown that there is a marked negative relationship between income inequality and social mobility. Utilising Intergenerational Earnings Elasticity data from Blanden, Gregg, and Machin (2005) , Wilkinson and Pickett (2009) first outline this relationship cross-nationally for eight OECD countries. Corak (2013) famously expanded on this with his ‘Great Gatsby Curve’ for 22 countries using the same measure. I update and expand on these studies in Figure 4 to include all 36 OECD members, utilising the WEF’s inaugural 2020 Social Mobility Index. It clearly shows that social mobility is much lower on average in more unequal countries across the entire OECD.

Index of social mobility by Gini coefficient. Data on social mobility index from World Economic Forum (2020) ; data on Gini coefficients from SWIID ( Solt 2020 ).

A primary driver for the negative relationship between inequality and social mobility, derives from the availability of resources during early childhood. Life chances have been shown to be determined in early childhood to a disproportionately large extent ( Jensen and van Kersbergen 2017 : 29). Children in more equitable regions such as Scandinavia, have better access to resources, as they go to similar schools, receive similar educational opportunities, and have access to a wider range of career options. Whereas in the UK and US, a greater number of jobs at the top are closed off to those at the bottom and affluent parents are far more likely to send their children to private schools and fund other ‘child enrichment’ goods and services ( Dorling 2017 : 26). Therefore, as income inequality rises, there is a greater disparity in the resources that rich and poor parents can invest in their children’s education, which has been shown to substantially affect “cognitive development and school achievement” ( Brown 2017 : 33–34).

4 Conclusions

The causes and consequences of income inequality are multifaceted. Income inequality is not the inevitable outcome of irresistible structural forces such as globalisation or technological development. Instead, it has largely been driven by a multitude of institutional political choices. These preventable causes that have given rise to inequality have created socio-economic challenges, due to the demonstrably negative outcomes that inequality engenders.

The neoliberal political consensus poses challenges for policymakers to arrest the rise of income inequality. However, there are many proven solutions that policymakers can enact if the appropriate will can be summoned. Restoring higher levels of labour protections would aid in reversing the declining trend of labour wage share. Similarly, government promotion and support for new corporate governance models that give trade unions and workers a seat at the table in ownership decisions through board memberships, would somewhat redress the increasing power imbalance between capital and labour that is generating more inequality. Greater regulation aimed at limiting the now dominant shareholder principle of maximising value through share buy-backs and instead offering greater incentives to pursue maximisation of stakeholder value, long-term financial stability and investment, can reduce inequality. Most importantly, tax policy can be harnessed to redress income inequality. Such policies include restoring higher marginal income and corporate tax rates, setting higher corporate tax rates for firms with higher ratios of CEO-to-worker pay, and establishing luxury taxes on spiralling compensation packages. Finally, a move away from austerity, which has gripped the West since the financial crisis, and a move towards much greater government investment and welfare state spending, would also lift growth and low-wages.

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Rising inequality: A major issue of our time

Subscribe to global connection, zia qureshi zia qureshi senior fellow - global economy and development.

May 16, 2023

Income and wealth inequality has risen in many countries in recent decades. Rising inequality and related disparities and anxieties have been stoking social discontent and are a major driver of the increased political polarization and populist nationalism that are so evident today. An increasingly unequal society can weaken trust in public institutions and undermine democratic governance. Mounting global disparities can imperil geopolitical stability. Rising inequality has emerged as an important topic of political debate and a major public policy concern.

High and rising inequality

Current inequality levels are high. Contemporary global inequalities are close to the peak levels observed in the early 20th century, at the end of the prewar era (variously described as the Belle Époque or the Gilded Age) that saw sharp increases in global inequality.

Over the past four decades, there has been a broad trend of rising income inequality across countries. Income inequality has risen in most advanced economies and major emerging economies, which together account for about two-thirds of the world’s population and 85 percent of global GDP (Figure 1). The increase has been particularly large in the United States, among advanced economies, and in China, India, and Russia, among major emerging economies.

Figure 1. Inequality has risen in most advanced and major emerging economies Richest 10% income share, 1980-2020

Source: Author, using data from World Inequality Database . Note: Pre-tax national income. Some data points are extrapolated.

Beyond these groups of countries, the trend in the developing world at large has been more mixed, but many countries have seen increases in inequality. In regions such as Latin America, the Middle East and North Africa, and sub-Saharan Africa, income inequality levels on average have been relatively more stable, but inequality was already at high levels in these regions—the highest in the world.

Wealth inequality within countries is typically much higher than income inequality. It has followed a rising trend across countries since around 1980, similar to income inequality. Higher wealth inequality feeds higher future income inequality through capital income and inheritance.

The increase in inequality has been especially marked at the top end of the income distribution, with the income share of the top 10 percent (and even more so that of the top 1 percent) rising sharply in many countries. This was so particularly up to the global financial crisis of 2008-09. Those in low- and middle-income groups have suffered a loss of income share, with those in the bottom 50 percent typically experiencing larger losses of income share. These trends in inequality have been associated with an erosion of the middle class and a decline in intergenerational mobility , especially in advanced economies experiencing larger increases in inequality and a greater polarization in income distribution.

While within-country inequality has been rising, inequality between countries (reflecting per capita income differences) has been falling in recent decades. Faster-growing emerging economies, especially the large ones such as China and India, have been narrowing the income gap with advanced economies. Global inequality—the sum of within-country and between-country inequality—has declined somewhat since around 2000, with the fall in between-country inequality more than offsetting the rise in within-country inequality. As within-country inequality has been rising, it now accounts for a much larger part of global inequality (about two-thirds in 2020, up from less than half in 1980). Looking ahead, how within-country inequality evolves will matter even more for global inequality.

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February 25, 2020

The interplay between the evolution of within-country inequality and between-country inequality, coupled with the differential growth performance of emerging and advanced economies, in recent decades presents an interesting picture of middle-class dynamics at the global level (as depicted by the well-known “ elephant curve ” of the incidence of global economic growth). It shows, for the period since 1980, a rising middle class in the emerging world and a squeezed middle class in rich countries. It also shows an increasing concentration of income at the very top of the income distribution globally.

Drivers of rising inequality

Shifting economic paradigms are altering distributional dynamics. Transformative technological change, led by digital technologies, has been reshaping markets, business models, and the nature of work in ways that can increase inequality within economies. While the specifics differ across countries, this has been happening broadly through three channels: more unequal distribution of labor income with rising wage inequality as technology shifts labor demand from routine low- to middle-level skills to new, higher-level skills; shift of income from labor to capital with increasing automation and a decoupling of wages from firm profitability; and more unequal distribution of capital income with rising market power and economic rents enjoyed by dominant firms in increasingly concentrated and winner-takes-all markets. These dynamics are more evident in advanced economies but could increasingly impact developing economies as the new technologies favoring capital and higher-level skills make deeper inroads there.

Globalization (international trade, offshoring) also has contributed to rising inequality within economies, especially in advanced economies by negatively affecting wages and jobs of lower-skilled workers in tradable sectors. These sectors increasingly extend beyond manufacturing as digital globalization expands the range of activities, including services, deliverable across borders.

In emerging economies, technology is reshaping how international trade affects national inequality. The new technologies, born in advanced economies, are shifting manufacturing and global value chains toward higher capital and skill intensity. Leading manufacturing firms located in emerging economies and engaged in exporting are adopting these technologies in order to be able to compete, diminishing employment generation and wage growth prospects for less-skilled workers from this higher-productivity segment of industry in economies whose factor endowments would warrant less capital- and skill-intensive technologies—and thus limiting the potential of international trade to reduce inequality within these economies by boosting demand for their more abundant factor endowment (less-skilled workers). Meanwhile, smaller firms that absorb most such workers in these economies remain engaged in low-productivity activities, many in the informal economy and in petty service sectors.

Globalization has been a force in recent decades for reducing inequality between economies by expanding export opportunities for emerging economies and spurring their economic growth. But globalization’s role in promoting international economic convergence faces new challenges as technological change alters production processes and trade patterns (more on this below).

Other broad trends in recent decades affecting the distribution of income and wealth include changes in institutional settings such as economic deregulation, increasing financialization of economies coupled with a high concentration of financial income and wealth, and erosion of labor market institutions such as minimum wage laws and collective bargaining. Moreover, the redistributive role of the state has been weakening with declining tax progressivity and with transfer programs facing the pressure of tighter fiscal constraints.

Role of public policy

Large and persistent increases in inequality within economies are not an inevitable consequence of forces such as technological change and globalization. Much depends on how public policy responds to the new dynamics that these forces generate. In the midst of these common forces of change, the rise in inequality has been uneven across countries. The difference lies largely in countries’ institutional and policy settings and how they have responded. In general, looking across countries, public policy has been behind the curve. It has been slow to rise to the new challenges to promote more inclusive outcomes from economic change.

Public policy to reduce inequality is often viewed narrowly in terms of redistribution―taxes and transfers. This is indeed an important element, especially in view of the erosion of the state’s redistributive role in recent decades. But there is a much broader policy agenda of “predistribution” that can make the growth process itself more inclusive and produce better market outcomes—by promoting wider access to new opportunities for firms and workers and enhancing their capabilities to adjust as market dynamics shift.

This latter agenda of reforms spans competition policy and regulatory frameworks to keep markets competitive and inclusive in the digital age; innovation ecosystems and technology policies to put innovation to work for broader groups of people; digital infrastructure and literacy to reduce the digital divide; education and (re)training programs to upskill and reskill workers while addressing inequalities in access to these programs; and labor market policies and social protection systems to enable workers to obtain a fair share of economic returns and to support them in times of transition. In many of these reform areas, the new dynamics that economies are facing call for fresh thinking and significant policy overhaul.

Outlook for inequality

Absent more responsive policies to combat inequality, the current high levels of inequality are likely to persist or even rise further. Artificial intelligence and related new waves of digital technologies and automation could increase inequality further within countries. Even as new technologies increase productivity and produce greater economic affluence, and new jobs and tasks emerge to replace those displaced and so prevent large technological unemployment, inequality could reach much higher levels. The economic fallout of the COVID-19 pandemic has reinforced some of the inequality-increasing dynamics. Also, a high and increasing concentration of wealth can exacerbate income inequality in a mutually reinforcing cycle.

Technological change also poses new challenges to global economic convergence that has reduced inequality between countries in the past couple of decades. Faster growth in emerging economies led by export of manufactures has depended greatly on their comparative advantage in labor-intensive manufacturing based on large populations of low-skill, low-wage workers. This source of comparative advantage increasingly will erode as automation of low-skill work expands. Emerging economies face the challenge of recalibrating their growth models as technology disrupts traditional pathways to growth and development.

Emerging economies’ growth prospects also face other headwinds, including the scarring effects of the pandemic and global supply chain disruptions exacerbated by the war in Ukraine and an unsettled global geopolitical environment, which would hit the more trade-dependent economies harder. If growth in emerging economies falters, the decline in between-country inequality will slow, which could stall or even reverse the modest decline in global inequality observed since about 2000 if within-country inequality continues to mount.

Climate change is another factor that could worsen inequality within and between countries. Low-income groups and countries are more vulnerable to the impacts of climate change and have less capacity to cope with them.

Income and wealth inequality is elevated. In the absence of policies to counter recent trends, inequality could rise to still higher levels. High and rising inequality entails adverse economic, social, and political consequences. Policymakers must pay more attention to the changing distributional dynamics in the digital age and harness the forces of change for more inclusive prosperity. History tells us that large and unabated rises in inequality can end up badly.

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How is Central Bank Independence Shaping Income Inequality in Developing Countries?

• Published: 21 May 2024

Cite this article

• Ayoub Rabhi   ORCID: orcid.org/0000-0002-5069-9257 1 &
• Brandon Parsons 2  

Amid growing global concern over increasing income inequality, the role of monetary policy and the central bank have come under increased scrutiny. This study employed a dynamic panel data analysis, drawing upon data from the World Bank's PovcalNet and the World Development Indicators for 25 countries from 2000 to 2018. The research explored the effects of central bank independence on income distribution. The analysis revealed that central bank independence plays a crucial role in controlling inflation, which, in turn, contributes to lowering income inequality. However, the findings also highlighted that while central bank independence fosters financial stability and controls inflation, it tends to weaken the effectiveness of fiscal policy, potentially exacerbating income disparities. Additionally, it is observed that central bank independence is associated with greater financial openness, which can lead to increased asset prices and further widen the income inequality gap. This research offers a nuanced understanding of the trade-offs entailed in central bank policies and their extensive socioeconomic ramifications, thereby contributing a novel perspective to the discourse on monetary policy and income inequality.

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Countries included in the study: Argentina, Belarus, Bolivia, Brazil, Colombia, Costa Rica, the Czech Republic, The Dominican Republic, Ecuador, Georgia, Hungary, Indonesia, Kazakhstan, Kyrgyzstan, Moldova, North Macedonia, Paraguay, Peru, Poland, Romania, Russia, Thailand, Turkey, Uruguay, and Ukraine.

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• Economic Inequality and Burden-Sharing in the Provision of Local Environmental Quality
• Educational Assortative Mating and Economic Inequality: Latin American Countries Comparative Analysis
• Economic Inequality and Economic Development: Global Experiences for the Arab World
• Educational Imbalance, Socio-Economic Inequality, Political Freedom and Economic Development
• Economic Inequality and Environmental Quality: Evidence of Pollution Shifting in Russia
• The Relationships Between Educational Opportunity and Economic Inequality
• Economic Inequality and Growth Before the Industrial Revolution
• Education and the Reproduction of Economic Inequality in the United States
• Economic Inequality and Happiness: Quantitative Study Among the Elderly in Rural Vietnam
• Overview of Financial Frictions, Occupational Choice, and Economic Inequality
• Economic Inequality and Health: Looking Beyond Aggregate Indicators
• Economic Inequality and How It Affects Overall Economic Growth
• Globalization and Economic Inequality in the Short and Long Run
• Economic Inequality and Intergenerational Transfers: Evidence From Mexico
• Globalization: Economic Inequality and International Trade
• Economic Inequality and Its Effects on Economic Growth
• The Problems of Health Care Quality and Economic Inequality
• Economic Inequality and Optimal Redistribution: A Theoretical and Empirical Analysis
• Higher Education, Economic Inequality and Social Mobility: Implications for Emerging East Asia
• Economic Inequality and Paretian Welfare Economics: Some Insinuating Questions
• Identity, Patronage, and Redistribution: Economic Inequality in Bolivia Under Evo Morales
• Economic Inequality and Political Power: Comparative Analysis of Argentina and Brazil
• Income Mobility and Economic Inequality From a Regional Perspective
• Economic Inequality and Poverty in the Very Long Run
• Individual Health and the Visibility of Village Economic Inequality
• Economic Inequality and Social Differentials in Mortality
• Economic Inequality and the Urban Environment: Case of Water and Sanitation
• Intergenerational Earnings Persistence and Economic Inequality in the Long-Run
• Linking International Migration, Ethnicity, and Economic Inequality
• Economic Inequality: The Middle Class in America Is Becoming Poorer
• Labor Markets and Economic Inequality in the United States
• Economic Inequality: The Wealth Gap Between Americans
• Local Social Inequality, Economic Inequality, and Disparities in Child Height in India
• Measuring Economic Inequality: Deprivation, Economising, and Possessing
• Microscopic Models for Welfare Measures Addressing a Reduction of Economic Inequality
• Does Economic Inequality Affect Child Malnutrition?
• Has Trade Liberalization Increased Economic Inequality Among the Mexican States?
• How Does Economic Inequality Affect Our Lives?
• Was the Early Modern Period a Time of Growing Economic Inequality?
• Does Economic Inequality Affect the Quality of Life of Older People in Rural Vietnam?
• Is Economic Inequality a Global Problem?
• What Is the Concept of Economic Inequality?
• Does Economic Inequality Exist in the United States?
• How Does Economic Inequality Cause Social Problems?
• What Are the Consequences of Economic Inequality?
• How Is Economic Inequality Different From Poverty?
• Does Economic Inequality Affect Institutional Quality?
• What Are the Main Types of Economic Inequality?
• How Does Social Class Shape Attitudes on Economic Inequality?
• Where Is Economic Inequality Most Common?
• How Does Economic Inequality Affect Mental and Physical Health?
• Why Is Economic Inequality a Social Problem?
• How Does Economic Inequality Affect Growth?
• Which Country Has High Economic Inequality?
• How Do Sweden and Colombia Deal With Economic Inequality?
• What Is the Measure of Economic Inequality?
• Does Economic Inequality Cause Poverty?
• How Can We Solve Economic Inequality?
• Why Is It Difficult to Measure Economic Inequality?
• How Does Economic Inequality Affect the United States?
• What Was the Main Cause of Economic Inequality According to Karl Marx?
• Does Democracy Reduce Economic Inequality?
• How Does Economic Inequality Shape Social Class Stereotyping?
• What Is the Relation Between Social and Economic Inequality?
• How Does Economic Inequality in the US Compare to Other Countries?
• Gender Inequality Research Topics
• Homelessness Questions
• Globalization Essay Topics
• Macroeconomics Topics
• Great Depression Research Topics
• Poverty Essay Titles
• Segregation Research Topics
• Social Class Research Ideas
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241 Inequality Essay Topics on Income, Gender, & Social Injustice

Are you searching for the best inequality topics for your presentation, discussion, or research paper? Look no further! StudyCorgi has compiled an extensive list of social, income, racial, and gender inequality topics to write about. Feel free to use these ideas for your writing assignments on injustice issues.

🏆 Best Research Topics on Inequality

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• Gender Inequality Issue and Solutions
• Effects of Social Inequality: Essay Example
• Gender Inequality in the Workplace
• Discrimination and Inequality in the Education System
• Social Problem Analysis: Social Inequality in Education
• Men’s Superiority Theory and Inequality Issues
• Characteristics of Feminism: Inequality in the Aging Experience
• Social Inequality in Poems, Songs, and Films Social stratification in the U.S is based on race and ethnicity and is demonstrated in films, poetry, and songs.
• Invisible Inequality: Childrearing in Black Families and White Families Social inequality but not racial differences affect the range of activities in which children may be involved and their future lives.
• Income Inequality in Modern Society The issue of income inequality has not yet been resolved. It remains a significant problem in society and leads to social and economic hardship.
• Social Inequality: “The Notebook” by Nick Cassavetes The purpose of this paper is to illustrate social inequalities in American society through The Notebook movie by Nick Cassavetes.
• Social Inequalities for People With Disabilities Individuals with disabilities face many social problems – some are very visible, and others are hard to notice for people without disabilities.
• Social Inequality, Discrimination, and Solution Social inequality is one of the primary drivers of racial discrimination. At the micro-level, unequal distribution of wealth contributes to racial segregation.
• Poverty and Inequality: Income and Wealth Inequality The Stanford Center of Poverty and Inequality does an in-depth job of finding causes and capturing statistics on poverty and inequality.
• Women: Gender Inequality and Discrimination This paper explains whether innate gender differences exist and how they determine the abilities, choices, and aptitudes that differentiate men from women.
• Education and Social Inequality The problem of the relationship between education and social inequality has been of concern to sociologists for more than a decade.
• Gender Roles and Inequalities in Advertisement The perfume for men, Dior Sauvage, was released in 2019, and an advertising campaign supported it with Johnny Depp.
• Sexism and Gender Inequality in Sport The paper reviews an example of sexism and gender inequality and academic scholarship on the topic. Women athletes have faced gender inequality and sexism.
• Sociable Letters: Inequality in Social and Economic Status The paper discusses “Sociable Letters” which demonstrates the true happiness gap between the upper and lower classes, demonstrating that nobles are jealous of each other.
• Social Stratification and Inequality Social stratification is a term that describes the social standing system: race, money, power, and education form the social status which differs one group of people from others.
• Education and Income Inequality Relationship Income inequality is a great problem of every society since it widens the chasm between the richest and the most deprived people and negatively affects economic growth.
• The Problems of Gender Inequality This paper tells that gender inequality is a serious issue, which affects everyone. It starts with the stereotype of males’ superiority and turns into numerous problems.
• Marriage and Inequalities With Gender The issue of bridging gender equality has been the center of debate in the 21 century. The role of women in society could no longer be underestimated.
• Approaches to the Study of Social Inequality The paper states that class inequality inherently implies different opportunities and unequal access to available public and material goods.
• Role of Ideology and Institutions in Gender Inequality This paper aims to present the current status of the issue while evaluating the importance of ideologies and institutions, masculine and feminine norms, the racialization of gender.
• Gender Inequality at Google Inc. Some percentage of women employed in Google shows that it is possible and both genders should work hard to get a job there.
• Inequality of Digital Divide in Education Students’ ability to learn is hindered by their impaired access to technology devices because they cannot keep up with integrating technology into teaching.
• Discrimination and Inequality in Society Countering discrimination and a meaningful debate about ethnic and racial equality requires a mature society with well-developed legal institutions.
• Social Inequality Depicted in Art Works Understanding social inequality is important since it is the root of major social problems such as unemployment, substance abuse, and criminality.
• The Pink Tax: Inequality Should Be Outlawed Inequality can be manifested in different dimensions, ranging from racial prejudices to judgment of personal life partner choices.
• Gender Inequality in French Hospitality Industry The study scrutinizes the French hotel and tourism sector and the concerns and challenges women encounter in management roles and compares them to the trends.
• Linking Income, Wealth, and Inequality The main reasons for inequality are unequal distribution of property, differences in educational level, skills, work experience, and other essential factors.
• Why It Is Important to Fight Social Inequality Seems vital to take action and do something about this problem. The following paper will discuss why it is important to deal with social inequalities.
• “Gender Inequality in “”The Yellow Wallpaper””, “”A Rose for Emily””, and “”Trifels””” The paper focuses on analyzing A Rose for Emily, written by William Faulkner, The Yellow Wallpaper, by Charlotte Perkins Gilman, and Susan Glaspell’s Trifles.
• Racial Inequality in “Recitatif” by Morrison Race, inequality, discrimination, and prejudice are the issues that have been significantly addressed recently but will probably remain a part of human nature forever.
• Inequality in “The Lesson” by Toni Cade Bambara Toni Cade Bambara’s “The Lesson” is about the social and economic injustices experienced in many societies. The story highlights the oppression and unfairness faced in the US.
• The Race, Crime, and Urban Inequality Theory The theory of race, crime, and urban inequality is based on the paradigm of social disorganization theory formulated by the Chicago School.
• The Problem of Social Inequality at Schools in Canada Social inequality at schools is a issue that undermines the effectiveness of secondary education and leads to long-term and short-term problems of individual and group nature.
• Inequality in Russia: Causes and Consequences This paper argues that corruption regional inequalities and bias policy framework are the causes of inequality in Russia.
• Social Institutions Maintaining Inequality Systems The paper investigates the aspects of influence that social institutions have on oppression and privilege as well on access to resources.
• Sex, Gender, and Inequalities In this paper, gender binarism, sexism, institutionalized gender, and sex patterns in the society are assessed. It is important in reviewing the differences between gender and sex.
• Gender Inequality in Security Sector The assumption of gender composition in the security sector has been linked with the apparent norm that women cannot work in the military.
• Gender Inequality in Social Inequality This topic was chosen because the problem of gender inequality has existed for a long time and is being solved with varying success.
• The Problem of Inequality of Criminal Justice Pregnancy and maternity in correctional facilities are some of the controversial problems in criminal justice.
• Social Problem of Inequality Studies of social inequality included non-urban areas and social inequality factors that had not been included in previous studies.
• Tax Inequality in America While the American tax model is intended to remain progressive, little gains have been recorded so far since the level of tax inequality has remained the same over the years.
• Education and Income Inequality in the United States The education-based income gap is one of the areas of major concern for policymakers as education is one of the influential factors leading to the increase in the gap.
• Racial Inequality in the USA: Problem & Solution In the current world, the USA still has challenges in overcoming racial inequality, for example, people practice racial inequality for job promotions or payments.
• India’s Policies to Tackle Poverty and Inequality This paper aims to identify potential policies in infrastructure and education and develop new options to deal with poverty and inequality in India.
• Brazil’ Poverty and Inequality Poverty in Brazil has been unresponsive to growth due to the challenges of eliminating inequality. The poverty eradication programs reduced the poverty rate.
• Gender Inequality as an International Issue The presentation is devoted to an issue: gender inequality. The inequality in career progression that is still characteristic of several societies all over the world.
• Income Inequality Based on Gender Income inequality based on gender is the dissimilarity between male and female earnings usually expressed in part by male earnings.
• Injustice, Inequality, and the Quest for Inclusivity: Synthesis and Reflection It should be noted that injustice and inequality in American society, discrimination and oppression of citizens, and the issue of exclusivity of individuals are fundamental concepts.
• Ethics in Social Work: Addressing Economic Inequality It is imperative to understand the application of core ethical values of social work that are relevant to the identified problem of inequality and explore the challenge.
• Gender Inequality and Feminism in a TV Series Gender inequality indicators measure quantifiable aspects of biases against women or men. It is the women who suffer the most from gender discrimination.
• Legal Issues of Racial Inequality The most serious consequences of discrimination on the basis of race are associated with violence and impairment of rights.
• Inequalities in China and India The paper states that inequalities in China and India are a big issue after looking at the drastic economic differences within the countries.
• Social Inequality and Juvenile Delinquency There is a high crime rate among adolescents. At the same time, as it is commonly believed, young people are considered to be the future of the country.
• Vulnerable Populations: Homeless People and Health Inequalities This paper focuses on vulnerable populations, including changing students’ perceptions of the homeless and the immense health inequalities associated with the homeless population.
• Health Care Inequality: The Socio-Economic Factors This paper aims at outlining the socio-economic factors, particularly economic inequality, as the most significant cause for healthcare inequality in the USA.
• Racial and Ethnic Inequality Perception The paper stresses the essence of exploring the roots of racial and ethnic inequality in the United States to obtain a better sense of the people who are trying to stir this issue.
• Determinants in Oral Health Inequalities The paper seeks to look at the existing inequalities in dental health. The paper also proposes ways that can be used to reduce these inequalities.
• Social Inequality at School The aim of this project is to contribute to the development of tailored solutions for the problems of Canadian school education.
• Social Inequalities’ Influences on Health There is a strong relationship between the contribution that society makes to the health of an individual and just how much social inequalities affect the health of an individual.
• Gender Inequality in India and Iran Politics This paper explores the role of women in politics in India and Iran as the two countries have different nature of political gender inequalities.
• Debate on Gender and Sex Inequalities The main aim of this paper was to analyze the distinction between gender and sex. The impacts of the two on social structures were highlighted.
• Colonialism, Inequality, and Modernity in European History The paper discusses the ideas of several political and social theorists, including Aimé Césaire, Jean-Jacques Rousseau, and Karl Marx.
• Social Inequality and Global Disparities There are still disparities in the globe based on opportunity, income, sex, age, handicap, sexual orientation, color, class, and ethnicity.
• The Gender-Based Pay Inequality Factors This research paper focuses on the factors that influence societal engagement in the widespread gender pay gap.
• Monetary Policy, Inequality, and Federal Reserve Interest Rates One of the most effective methods for advancing and improving financial knowledge is the use of legislation and public policy initiatives.
• The Persistence of Inequality From Different Perspectives This paper delves into the concept of inequality, highlighting its long-standing presence in society and its impact on both the global community and local communities.
• Addressing Global Inequality in the Era of Globalization While globalization has led to social, political, and economic increase, it has also given rise to global inequality, particularly through the exploitation of developing countries.
• Race and Sports: Inequality in Sports In her New York Times article “Equity in Sports Has Focused on Gender, Not Race. So Gaps Persist,” Alanis Thames discusses mass gender and racial inequality in sports.
• The Problem of Inequality in Crack and Powder Cocaine Sentencing The difference in perception and sentencing of cases of crack cocaine and powder cocaine raises a major inequality problem in legislation and society.
• Global Gender Inequality and Its Main Trends In this research study, the scholars investigate whether gender inequality is decreasing across the world as is the case with other welfare indicators.
• Pay Inequality and Its Impact on Women and Other Groups This article discusses pay inequality as demonstrated in the YouTube video “Child Social Experiment Looks at Gender Equality”.
• Economic Inequality and Its Relationship to Poverty This research paper will discuss the problem of economic inequality and show how this concept relates to poverty.
• Life of Humanity: Inequality, Poverty, and Tolerance The paper concerns the times in which humanity, and especially the American people, live, not forgetting about inequality, poverty, and tolerance.
• Gender Inequality for Men and Women Gender inequality in the US for men and women has significant consequences both in the family and in the professional sphere. Thus, in the family, inequality is primarily reflected in specific relationships between the genders, and it also affects parents’ roles. In the family, men may sometimes experience pressure and…
• Inequality in the Mayan Civilization The research used a thought-provoking methodology to discuss the reasons for inequality and regions of Maya settlement.
• Racial Inequality in Modern Society Racial discrimination and the inequality caused by it in relation to representatives of any non-white community is the most critical problem of modern society.
• Maintaining Hierarchical Interactions with Concealed Inequality in Language The objective of this research is to the connection between language, authority, and interpersonal interactions.
• Gender Inequality Among Women in Canada This paper seeks to discuss the approaches to gender inequality, the causes, impacts, and solutions to gender inequality among women in Canada.
• Racial Inequality Under the Law in Canada Black people in Canada have traditionally been segregated based on race through legislation, judicial rulings, and societal standards.
• Racial Inequality in Hiring and Workplace Racial discrimination involves denying people from a particular race equal treatment and opportunities as others due to variations in personal characteristics.
• Inequality Within the Australian Labour Market There is a need to identify the primary forms of imbalances in labor relations and analyze their consequences to propose possible solutions to the problem.
• Wealth Inequality and Redistribution: Robert Nozick’s Perspective Poverty and wealth inequality have been concerning society for a very long time. This paper examines Robert Nozick’s perspective concerning this issue.
• Capitalism as a Means of Promoting Inequality The degree to which capitalism has impacted the distribution of wealth and opportunities in society has shaped the course of events in the world.
• The Issue of Gender Inequality in Kenya Kenya is one of the countries in sub-Saharan Africa with oppressive conditions, most preferably the gender inequality and marginalization of a specific proportion of the populace.
• Social Inequality in the United States Social inequality is a critical aspect in the United States since it is intertwined with economic, cultural, and political issues.
• Inequality in American Society: Myths and Realities Inequality in modern society is the result of an economic model of capitalism, where each person’s input into the economic context is valued.
• The Racial Inequality Problem in the US Racial inequality is a complex issue that requires the efforts of the whole society in the history of the United States.
• History and Effects of Racial Inequality in the United States Racial inequality in the United States is a widespread issue that affects a significant portion of the population.
• The Concept of Social Inequality The concept of social inequality is essential for making a global change and improving everyone’s quality of life since it reflects the problems on a societal level.
• Addressing Economic Inequality: The Pandemic Challenge Economic inequality continues to be relevant to modern society, with the full range of human rights being available only to the wealthy minority.
• Economic Inequality and Pandemic Challenge The most vulnerable populations were affected by the coronavirus pandemic because they often could not access economic and public health resources to meet their needs.
• Economic Inequality Between Genders Discussions on the problems of gender inequality have been going on for decades that’s why the difference in the earnings between men and women is called the gender pay gap.
• Inequality and Poverty in the United States One of the most common myths is that the United States (US) is a meritocracy, where anyone can succeed if they maintain industriousness.
• Social Inequality and Human Rights in the Modern World This paper theorize civil rights to be the basis of developing the main social fields of education, healthcare, and career opportunities.
• Inspiration for Women to Address Inequality When you think about inequality, according to you, what kind of people face it now more than others? Blacks? Latinos? The right answer is women.
• Historical Review of Gender Inequality in the USA Gender inequality in society is a widespread problem worldwide, rooted in the patriarchal system and associated prejudices, and the United States is no exception in this regard.
• Pandemic Challenge and Economic Inequality The coronavirus pandemic has presented two significant challenges for American society: public health and economic crises.
• Inequality: The Lesson About Privilege There are several factors used to divide society into groups, and they can be based on age, nationality, poverty or wealth, skin color, and sexual orientation.
• Social Inequality: Challenges and Benefits Social inequality can be eliminated by massively investing in public finances to provide free education to everyone.
• Racial Inequality, Immigration, and Healthcare in the US This essay discusses racial inequality, immigration, and healthcare in America, focusing on the preferential treatment of different races in the U.S.
• The State of Women Inequality Worldwide Regardless of advancement toward gender impartiality in education, girls still represent a greater proportion of dropout children than boys.
• Racial Inequality in the Judicial System This essay will expound while offering some critiques and counter-arguments on why the justice offered by the justice system highly depends on the race of the convict.
• Globalization Impact on Socioeconomic Inequality This paper analyzes the link between globalization and socioeconomic inequality, and how the inequality problem can be mitigated.
• Economic Class Inequality in America The growing income inequality in America can no longer be neglected because it affects millions of people of different races and classes.
• Social Inequality and Discrimination in the US The problem of social inequality in the country has continued to widen the gap between the rich and the poor over the years.
• Racial and Ethnicity Inequality Racial and ethnic inequality is a national problem in the US. Non-dominant racial and ethnic groups have lower incomes and less access to medical services.
• Rising Crime and Ethnic Inequality in the United States The article raises the up-to-date topic of the sharp increase in the crime rate in the United States. The numbers are exceptionally high among African Americans and Latinos.
• Measuring Economic Inequality The measurement of economic inequality is challenged by the evidence of a wide partisan gap in whether inequality is a problem that needs addressing.
• Income Inequality: A Historical Review The problem of income inequality is of high social importance: it negatively affects the country’s economy and society.
• Inequality in the Texas Legislature Over the years, the constitution of the Texas Senate and state legislative chamber has always been discriminative against certain groups.
• Financial Inclusion and Income Inequality The effect of financial inclusion in overcoming income inequality depends on the government’s ability to create an enabling environment.
• The Hunger Games Book One: Inequality Problem Relation The first part of the trilogy Hunger Games tells about the despotic government, which organizes an annual demonstration game of survival, watched from the air by the whole world.
• Marketing and Interaction Through Social Media Platforms and Gender Inequalities The photos posted by individuals on their social media accounts reproduce gender inequalities and reinforce harmful gender identity norms.
• Racial and Ethnic Inequality: Annotated Bibliography An annotated bibliography on racial and ethnic inequality, exploring the topic in aspects of education and occupation, crimes, healthcare, and socioeconomic status.
• Misconceptions About Income Inequality Since the views on the current state of income inequality are diametrically opposite, it is essential to examine the exact situation on a global scale.
• “Measuring Inequality in Community Resilience to Natural Disasters” by Hong et al. This paper analyzes the scientific study “Measuring inequality in community resilience to natural disasters using large-scale mobility data” and the content of the article.
• Inequality Disparities in Georgia State The paper states that implementing evidence-based policymaking in the state of Georgia has the potential to eliminate equality disparities.
• Negative Consequences of Social Inequality This paper aims to prove social inequality has always led to negative consequences, analyze the injustice of the superiority of one gender, nation, or social group over another.
• “Inequality for All”: Arguments’ Study The film “Inequality for All” presents an idea that abolishing inequality is impossible in capitalism, and forcing such a system is strict socialism.
• Postapartheid South Africa: Understanding Inequality The abolition of the apartheid policy took place in harsh conditions, sometimes bordering on a civil war. This event was preceded by the radicalization of the black population.
• Concept of Educational Inequality The paper discusses the case of educational inequality. People share information with others by retweeting the post, taking a screenshot, or commenting on it.
• How Does Racial Inequality Play a Role in the US Culture? The topic of race is one of the most discussed in contemporary society. The paper explains how racial inequality plays a role in the United States culture.
• Racial Inequalities in the Context of Pandemic Vaccination To concretize the study, a current journalistic article in The New York Times was chosen to highlight racial inequalities in the context of pandemic vaccination.
• “Racial Inequality, at College and in the Workplace” by Johnson Despite the intentions to create an equal and unbiased society, many modern Americans still experience serious challenges based on racial or gender inequalities.
• Gender Inequality Articles by Beaumont vs. Eigenberg The purpose of this article is to analyze and compare two articles on gender inequality and gender bias as a cause of its prevalence.
• The PBS Interview on Income Inequality: Main Ideas The PBS interview on income inequality emphasizes the role of social class in the widening gap between the rich and the poor.
• Health Inequality in the United States Hospitals in the US should employ more health professionals from diverse ethnic backgrounds to overcome rising hindrances such as language barriers and promote equality.
• Gender Inequality in Ohio’s Education and Labor Market This paper provides an insight into the problems, solutions, and barriers to gender equality in the education and the labor market in Ohio state.
• Inequalities and Police Brutality Against the Black This paper aims to research racial inequality and hostile police attitudes towards the black population in the United States.
• Poverty in America: Socio-Economic Inequality The primary cause of poverty in the United States is socio-economic inequality since such ethnic minorities as Native Americans are among the poorest social groups in the US.
• McGuffey’s Justification of Inequality McGuffey’s references to morality imply that ideology is needed to assure the peaceful coexistence of unequal groups.
• Economic Inequality as a Social Welfare Challenge Economic inequality as a notion stands for the disparities in the individuals’ incomes and wealth caused by various social, geographical, and financial aspects.
• The Attitude to Inequality of Two People The purpose of this paper is to analyze the experience, beliefs, ideas, and attitudes to inequality of two people who are not seen as normal by conservative society members.
• Effects of the Income Inequality After watching the CNBC video, that described how the middle-skill workers share has shrunk over time, I thought of my uncle, who was laid off from a steel company in the early 2000s.
• Racial Inequality in Education: Remaining Problems In the essay, it will be argued that in education, the manifestations of racial inequality are still observed, although they often remain implicit and indirect.
• Income Inequality in Developed Countries This article describes the problem of income inequality in developed countries such as China, Germany, France, and the United States, and the reasons for this problem.
• Black Lives Matter: Fight Against the Inequality The Black Lives Matter reflected attitudes of black people of the country towards the killings caused by white cops. It implied the need to fight against the existing inequality.
• Inequality in Public Schools The history course was changed in 1954 when the US Supreme Court ruled unanimously that racial segregation in public schools violated the Fourteenth Amendment to the Constitution.
• Activism and Social Theory: Inequality The issues of equality became central to the U. S. social, political, and economic agendas. This paper dwells upon the coloniality of power, knowledge, and gender in American society.
• Globalization and Economic Inequality The debate on the issue of economic inequality mitigation has been one of the central aspects of global discussion for decades.
• Gender Inequality in Modern Societies and Its Reasons The essay is devoted to gender inequality in modern societies and its reasons. A short history of society’s development that shows the reasons for inequality.
• Determinants of Oral Health Inequalities The aim of the paper is to get all the players in the dental field to appreciate the role played by good oral health and hence stay committed to promoting it.
• Ethnic Inequality: Black Lives Matter The question of ethnic inequality is rather pronounced in the USA, where occurrences of unfair treatment against African American individuals are recorded more and more often.
• The Issue of Inequality in the United States The current situation in the USA proves that the growing level of inequality is relevant as long as there are people who consider it normal.
• “Coming of Age in Mississippi”: Inequality in a Society In the book “Coming of Age in Mississippi” The NAACP movement encouraged its members to participate in activities that protest against racial injustice in society.
• Racial Inequality in the Job Market of the U.S. Inequalities in the labor market in the United States can cause a major breakdown of the economy. Guarding the labor market is the most important responsibility of the leaders.
• Women and Inequality in Aboriginal Society Aboriginal women have never had the same rights like Aboriginal men, who have respect to pass on “Indian status” to their children.
• ‘Racial’ and Ethnic Inequality in Western Europe and North America Media has been found to play a major role in the production of ethnic as well as racial inequality in the various structures of the contemporary societies.
• The Unfairness and Inequalities Present in the World To this end, the focus will be on the unfairness and inequalities present in the world and how they affect the victims.
• Confidentiality and Inequality as Human Resource Management Issues The article raises questions about the need to maintain confidentiality in the team and prevent discrimination against people with disabilities.
• Economic Crisis and Inequality
• “Globalization, Poverty and Inequality” by Kaplinsky
• Continuing Inequalities in America
• Income Inequality in the Workplace: Feminist Responses
• Gender Inequality in Democratic Welfare States
• Global Poverty, Inequality, and Mass Migration
• Educational Policy for Income Inequality in India
• Poverty and Inequality Reducing Policies in China
• Labor and Income Inequality in the U.S.
• Low Wages and Inequality Solutions in the USA
• Education and Inequality in Various Countries
• American Welfare State and Income Inequality
• Inequality in Developing States and Its Measures
• Social Inequality and Stratification in the US
• Racial Inequality: African-American Males Experience
• Gendered Society, Inequality and Violence
• Criminal Behavior, Structural and Social Inequality
• Trust and Inequality as Economic Influences
• Racial Minorities and European Immigrants Inequality
• Racism and Inequality in the United States
• Economic Inequality in Australia
• Wealth Inequality in the United States’ Society
• US Racial Inequality, Legislation and Immigration
• Income Inequality: Changes and Causes in the US
• Disparity or Inequality in Health Care
• Economy Studying: Income Inequality
• Inequality in Wealth Distribution in the US
• Wealth Inequality Effects on American Democracy
• Racial Gender Inequality in the United States
• Income Inequality and Discrimination in the US
• Inequality in Australia: Poverty Rates and Globalism
• Inequalities in the Health Care Arena
• International Development, Colonialism, Social Inequality and Class Stratification
• How Wealth Inequality Affects Democracy in America?
• Global Inequality: Gender, Racial and Ethnic Inequality
• What Are Some Examples of Inequality?
• Are Earnings Inequality and Mobility Overstated?
• What Is Human Inequality?
• What Are the Five Types of Inequality?
• Are People Inequality Averse, and Do They Prefer Redistribution by the State?
• Why Is Inequality Important in Society?
• Are Private Transfers Poverty and Inequality Reducing?
• What Is the Impact of Inequality in Our Society?
• How Does Inequality Threaten All Human Rights?
• Can Educational Expansion Improve Income Inequality?
• Where Does Inequality Occur?
• Can Growth Compensate Inequality and Risk?
• Does Inequality Cause Civil War in the US?
• Can Higher Education Reduce Inequality in Developing Countries?
• Does Inequality Lead to Social Unrest?
• What Is the Major Cause of Social Inequality and Conflict in Societies?
• What Is the Difference Between Poverty and Inequality?
• Can Income Inequality Contribute to Understanding Inequalities in Health?
• How Does Inequality Affect the Economy?
• Has Inequality Risen or Fallen Around the World?
• Did Partial Globalization Increase Inequality?
• What Are the Two Main Approaches to Explaining Inequality?
• Does Agriculture Help Poverty and Inequality Reduction?
• What Are the Indicators of Inequality?
• Does Consumption Inequality Track Income Inequality in Italy?
• What Are the Three Ways to Measure Inequality?
• Does Economic Inequality Affect Child Malnutrition?
• Does Financial Development Increase Rural-Urban Income Inequality?
• Does Gender Inequality Hinder Development and Economic Growth?
• What Determines Gender Inequality in Household Food Security in Kenya?
• Gender-based violence and its societal impact.
• The effects of media portrayals of women on gender inequality.
• Challenges and progress in women’s political representation.
• Transgender inequality in the workplace.
• Addressing gender inequalities in healthcare.
• The glass ceiling: women’s underrepresentation in corporate leadership.
• The role of language in perpetuating inequality.
• The impact of masculine societal norms on men’s mental health.
• The gender gap in financial literacy.
• Gender bias in AI algorithms and ways to address them.
• The link between income inequality and economic growth.
• Racial disparities in wealth accumulation.
• Is universal basic income a solution to economic inequality?
• The role of taxation and wealth redistribution in addressing income inequality.
• The link between income inequality and access to healthcare and education.
• The likelihood of escaping poverty in the US.
• The connection between income inequality and social unrest.
• How does the gig economy promote economic inequality?
• The role of trade and global supply chains in income inequality.
• The impact of the housing market on wealth inequality.

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StudyCorgi. (2022, January 16). 241 Inequality Essay Topics on Income, Gender, & Social Injustice. https://studycorgi.com/ideas/inequality-essay-topics/

"241 Inequality Essay Topics on Income, Gender, & Social Injustice." StudyCorgi , 16 Jan. 2022, studycorgi.com/ideas/inequality-essay-topics/.

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1. StudyCorgi . "241 Inequality Essay Topics on Income, Gender, & Social Injustice." January 16, 2022. https://studycorgi.com/ideas/inequality-essay-topics/.

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StudyCorgi . "241 Inequality Essay Topics on Income, Gender, & Social Injustice." January 16, 2022. https://studycorgi.com/ideas/inequality-essay-topics/.

StudyCorgi . 2022. "241 Inequality Essay Topics on Income, Gender, & Social Injustice." January 16, 2022. https://studycorgi.com/ideas/inequality-essay-topics/.

These essay examples and topics on Inequality were carefully selected by the StudyCorgi editorial team. They meet our highest standards in terms of grammar, punctuation, style, and fact accuracy. Please ensure you properly reference the materials if you’re using them to write your assignment.

This essay topic collection was updated on January 8, 2024 .

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A snapshot of inequality in Australia

Research paper.

Released 20 / 05 / 2024

This paper provides an update on the state of economic inequality in Australia, reviewing the period of the COVID-19 induced recession and recovery. It also deep dives into economic inequality for three cohorts:

• older people
• Aboriginal and Torres Strait Islander people.

• A snapshot of inequality in Australia (PDF 1.2 MB)
• A snapshot of inequality in Australia (Word 8.4 MB)

Media release

New research provides a snapshot of inequality in australia.

New research from the Productivity Commission has unpacked changes to income and wealth levels during the COVID-19 pandemic.

“The initial pandemic period saw an unprecedented decline in income inequality. The incomes of lower-income households grew rapidly in relative terms in the early stages of the pandemic, due to the massive increase in support payments from the Government,” said Commissioner Catherine de Fontenay.

“Income inequality increased later in the pandemic period as the economy recovered and government support was phased out.”

The report also finds that wealth inequality fell across the pandemic period.

“Some lower-income Australians were able to save or reduce debt due to early government support. And although house prices soared during the pandemic period, the strongest price increases were in regional areas where house prices are lower. This all had the effect of reducing wealth inequality,” said Commissioner de Fontenay.

The report examines three cohorts in closer detail: older people, women, and Aboriginal and Torres Strait Islander people.

The report finds that while older Australians have relatively low incomes compared to working age Australians, many have significant wealth they can draw on to fund their spending.

“When you look at wealth and income together, older Australians are doing better on average than younger Australians,” said Commissioner de Fontenay.

The report also examines gender differences in income and wealth. It finds that women still have lower income than men at all levels of the distribution, but that the share of women at the top of the income distribution has increased.

“We are seeing some improvements in the income gap between men and women consistent with an increase in women’s workforce participation and a declining gender pay gap,” said Commissioner de Fontenay.

The gap between the average incomes of Aboriginal and Torres Strait Islander people and the Australian average income narrowed slightly early in the pandemic before widening in 2022.

“Economic measures provide only a partial indicator for overall wellbeing. This is a particularly significant consideration in the case of Aboriginal and Torres Strait Islander people, for whom wellbeing encompasses cultural identity, community connections and other measures of quality of life,” said Commissioner de Fontenay.

Media requests

Simon Kinsmore – 02 6240 3330 / [email protected]

• Preliminaries: Cover, Copyright and publication detail, Contents and Acknowledgements
• Executive summary
• 1.1 What is economic inequality and why examine it again?
• 1.2 How to measure inequality – a policymaker’s toolkit
• 2.1 Income inequality
• 2.2 Wealth inequality
• 2.3 Measures of potential and actual consumption
• 3.1 Variations in income and transfers across age groups
• 3.2 Measures of potential and actual consumption suggest less inequality between age groups
• 4.1 Income snapshot by gender
• 4.2 Gender differences in transfer payments
• 4.3 Men tend to have more assets and debts than women
• 5.1 Wellbeing encompasses more than income
• 5.2 Changes in income during the pandemic
• 5.3 Geography matters for Aboriginal and Torres Strait Islander incomes
• 5.4 Age and gender inequality within Aboriginal and Torres Strait Islander incomes
• A.1 Equivalised measures
• A.2 Calculating income
• A.3 Data sources

Printed copies

Printed copies of this report can be purchased from Canprint Communications.

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Research - 21.05.2024 - 10:40 

Three research projects honoured with "HSG Impact Award 2024"

In 2024, a total of three awards will be presented to: the research project "Designing hybrid work based on evidence" by Prof. Dr. Stephan Böhm, Dr. Martina Hartner-Tiefenthaler (TU Vienna) and Tarek Carls; the project "Green Investments and Top Income Inequality" by Prof. Dr. Ola Mahmoud and Lea Tschan; and Prof. Dr. Thomas Burri and "The First University of St.Gallen Grand Challenge – The EU A.I. Act 2023".

The jury, consisting of practitioners and university members, assessed applications from a wide range of HSG research disciplines. The prizes will be awarded during the Dies academicus next Saturday, 25 May 2024.

Rules of the game for hybrid forms of work

The flexibilization of work location and time has become an important factor for many companies in the battle for talent. The coronavirus pandemic has accelerated this development. Even though many companies are calling for a return to the office after the end of the pandemic, it is becoming increasingly clear that the future of office work will be hybrid – i.e. partly in the office and partly remote. But what is the best way to implement this form of collaboration? This is where the project by Prof. Dr. Stephan Böhm, Tarek Carls, and Dr. Martina Hartner-Tiefenthaler (TU Wien) comes in. Initiated by the Center for Disability and Integration at the University of St.Gallen and Audi AG, this project identifies ways in which hybrid teams can organise their collaboration in order to increase both efficiency and health.

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HSG Impact Award 2024: "Designing hybrid work based on evidence"

Green investments and unequal top incomes.

Green finance has fundamentally changed the financial industry. Investments in this area are crucial for sustainable projects and climate neutrality. The research project by Prof. Dr. Ola Mahmoud and Lea Tschan examines the relationship between green investments and income inequality, drawing on data sets from 87 countries from 2004 to 2020, and shows that green investments influence inequality through innovation and technological change. The social significance of green finance is illustrated in the study using examples from Switzerland. Conclusion: Political decision-makers need to balance green investments with social measures in order to ensure an inclusive and sustainable transition. The research project was supported by the Swiss National Science Foundation (SNSF).

HSG Impact Award 2024: "Green Investments and Top Income Inequality"

The eu a.i. act and the grand challenge.

In July 2023, a unique competition took place at SQUARE at HSG, in which the planned EU law on artificial intelligence was tested using AI applications. 12 teams from various disciplines took part to test the practicality of the law and developed suggestions for improvement. The event was of great benefit to both the technology companies and the participants, as it provided legal assessments and deepened understanding of the practical application of the law. The event also attracted media interest and received wide, positive coverage.

HSG Impact Award 2024: "The First University of St.Gallen Grand Challenge – The EU A.I. Act 2023"

Stanford University

Stanford Center on China’s Economy and Institutions is a joint effort of the Freeman Spogli Institute for International Studies and Stanford Institute for Economic Policy Research .

Exploring Trends in China’s Rising Income Inequality [ 5 min read ]

• Analysis of nationally representative data shows earners in the top 0.1% of China’s income distribution experienced an annual income growth of 12%, or a thirty-fold increase in income from 1988–2018.
• The bottom 5% of China’s earners experienced lower annual income growth of 4.9%, but still surpassed the fastest-growing group in the U.S. (3.0% for the top 0.001%). 
• Labor income (versus capital income) accounted for 90% of total income among the top tenth of China’s earners, a large share relative to countries like France and the U.S., reflecting significant gains in China’s human capital. 
• Government redistribution in China has had a limited impact on inequality, resulting in a reduction of the top income decile of only 4% in China, relative to 25% in France and 19% in the U.S.

Source Publication: Hongbin Li, Lingsheng Meng, and Yunbin Zhang (2023). How Common Is the Prosperity? The Trends and Nature of China’s Income Inequality, 1988–2018. Working paper. 

Read this brief on SUBSTACK

Incomes have risen dramatically in China over the past three decades, albeit from a very low base. What distinguishes the trends in income growth and inequality in China from the rest of the world?  

The data. The researchers rely on data from two nationwide household surveys: the China Household Income Project (CHIP), conducted in 1988, 1995, 2002, 2007, and 2013, and the China Family Panel Studies (CFPS), conducted every two years since 2010. Both CHIP and CFPS are nationally representative household surveys that provide information on demographics, education, employment, income, sources of income, and household assets and expenditures. The researchers primarily use the first wave of CHIP data from 1988 and the most recent wave of CFPS data from 2018 in their analyses. 

Researchers then construct a nationally representative sample of working-age individuals between 16 and 64 for a total of 58,952 individuals from the 1988 CHIP sample and 27,627 individuals from the 2018 CFPS sample. Finally, they calculate individual-level income before taxes and government transfers from 1988 to 2018 to determine how income inequality has changed over time. Pre-tax income includes labor income (including wage income, income from self-employment, private business and farm, and pension benefits), capital income (including income from rental properties, interest, dividends, and capital gains), and other income (including gifts from friends or relatives).  

Per capita income growth in China

Faster income growth among top earners drives rising inequality. Researchers find that China’s income growth, in the shape of a classic hockey stick, stays mostly flat across the entire income spectrum with a moderate positive slope before sharply spiking upward. The very affluent have experienced faster income growth over the past three decades compared to those in the lower income percentile. Individuals in the top 5% saw their average income grow at an annual rate of 8.9%, and those in the top 0.1% saw a staggering 12% annual growth in income, which equates to a 30-fold increase in their income between 1988 and 2018. Growth opportunities were strongly tilted toward the very upper end of the income scale.

Despite the widening inequality, however, both the middle class and even the poor also experienced remarkably rapid income growth. For a median adult in the income distribution, the annual growth rate (7%) resulted in an income eight times larger over the 30 years. Individuals in the bottom 10% experienced a 5% annual growth in their income, or a four-fold increase.  

International comparisons reveal China’s relatively high absolute income growth. Apart from France, top earners in the U.S. and Russia have also experienced significantly faster income growth over the last 30 years. However, for a median adult in the income distribution in China, the annual growth rate is six to seven percentage points higher compared to his or her counterpart in France, U.S., and Russia. An even more remarkable difference is observed for individuals at the bottom of the income distribution in China: the income growth rate of the bottom 5% of earners was 4.9% in China, surpassing the income growth rate of the fastest-growing group in the U.S., which was 3% per year for the top 0.001% of earners. 

Per capita income growth in China, Russia, the U.S., and France

Income growth attributed to labor income, not capital income. By examining the income composition of individuals within the top decile, the researchers find that labor income accounted for approximately 90% of their total income, reflecting significant gains in China’s human capital. These findings corroborate the relatively limited role of capital income compared to labor income among top earners in China: on average, the rates of return on capital for the top income groups were consistently below 1%. 

Government distribution does little to address inequality. The growth rates of income after taxes and government transfers for most of the population did not significantly differ from the growth rates of income before taxes and government transfers. The disparity becomes noticeable only for those in the bottom 20% of earners or in the top 20% of earners, though the overall disparity is relatively small (at less than one percentage point per year). Specifically, redistribution results in a reduction of the top income decile’s share by only 4% in China, relative to 25% in France and 19% in the U.S. Additionally, redistribution leads to an increase in the bottom 50% income share by 6% in China, relative to 52% in France and 53% in the U.S. These findings underscore the relatively limited impact of government redistribution in addressing inequality in China. 

Assessing the implications of rising inequality. Researchers highlight the rapid increase in income inequality in China from 1988 to 2018, primarily driven by substantial income growth among individuals at the top, as opposed to stagnant or declining incomes among those at the bottom. Individuals at the very bottom of the income distribution simultaneously experienced remarkable absolute real income growth in China. When the poor also experience absolute gains, the researchers suggest, high income inequality may be more tolerable. However, when overall economic growth stagnates, policymakers should take note as societal tolerance for growing inequality may wane. 

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I Keep The Affordable Care Act Working but Can’t Afford to See My Own Doctor

The federal healthcare marketplace’s customer service line is run by a for-profit federal contractor that gives its employees little more than the bare minimum.

Research & Commentary

May 21, 2024.

by Katherine Charles

I love my job.

Every day I get to answer phone calls from some of the tens of millions of Americans who rely on the Affordable Care Act and help them get the healthcare benefits they need. 

Even though I do an essential job, my employer — the federal call center run by Maximus in Tampa, Florida — does not pay me enough or provide me with the healthcare benefits needed to be able to treat my own health condition. 

Maximus signed a 10-year deal worth $6.6 billion in 2022 to field calls about the federal healthcare marketplace and Medicare. The company has 10,000 employees across 12 call centers, mostly in the South and Southwest.

Companies like Maximus that are getting so much government money should have to create good jobs with liveable wages, decent benefits, and the right to unionize — the same conditions that federal workers enjoy. President Biden has taken some important steps, especially to set high standards for construction workers on new big infrastructure and clean energy projects.  

Protecting Construction Jobs

Broadband work should be union work

But more needs to be done to make sure service contract workers like me get a fair reward for our labor — instead of letting so much of public money go to rich executives and shareholders. 

While many of us at Maximus who field calls all day make around $17 an hour, our CEO, Bruce Caswell, got a 17 percent raise last year to $7.3 million. Over the past four years combined, Maximus has awarded Caswell over $27 million and spent over half a billion dollars on stock buybacks and dividends to enrich shareholders.

This September will mark 10 years of working at Maximus for me. My only major raise in that time came when President Biden set the minimum wage for all federal contract workers at $15 dollars in 2022. While we appreciate the pay hike, for a single mother of two the minimum doesn’t cut it, I need a real living wage. Instead, my only raise in the last two years was 22 cents.

Our healthcare benefits aren’t much better. I’m supposed to visit the doctor every three months to treat a chronic health condition, but because our deductibles are so high, I haven’t been in two years.

Because of the issues with pay and healthcare, last year I joined the campaign to unionize Maximus workers with the Communication Workers of America. The process is long and different locations are moving at different speeds, but we’ve already had some victories.

After we protested our high health costs, Maximus dropped our health insurance deductibles significantly. 

Why the walk-off?

Maximus workers need affordable healthcare

We need more help, though. I’ve participated in several protests at my call center demanding $25 an hour and increased benefits from Maximus.

I’ve also gone to Washington, D.C., to call on the Biden administration to follow through on its promise to create “good jobs” with federal money. Last fall I even got to take my daughter with me to speak with lawmakers in Congress.

I’m not going to quit because I don’t feel properly valued or because the benefits are not good. I’m going to stay and fight within the company to make it better, because the ACA is a great program that is helping millions of Americans. 

And even though I know that I can be fired at any time — Maximus laid off more than 700 employees in one month last year — I’m standing up for my rights. I’m standing up for a better company and for a better future for my children.

Katherine Charles is a federal healthcare marketplace customer service specialist at the Maximus call center in Tampa, Florida.

Faces on the frontlines ,, public subsidies ,, explore more, i run a food pantry but it’s not enough. we need funding for snap..

by Carla Ventura

I’m proud to help my neighbors. But food donations are no substitute for government nutrition programs like SNAP, which is now under threat.

Southern Autoworkers’ Union Drives Can Help Reverse Decades of Job Quality Decline

by Marc Bayard

by Dev Wakeley

On the heels of a UAW victory in Tennessee, Mercedes-Benz workers are about to vote on unionization in Alabama.

Planet CEO vs. Planet Worker

November 18, 2010.

by Chuck Collins

Trump’s Corporate Tax Cuts Paved the Way for Inflation

May 16, 2024.

by Lindsay Owens

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Gen Z’s Mental Health, Economic Distress and Technology

Mental health indicators for younger generations have worsened in the past decade. Poor mental health can have economic consequences (PDF)  for individuals, their families, workplaces and communities. It can also be a barrier to finishing school and to entering or staying in the labor market, and it can reduce labor productivity, all of which could result in long-term consequences for young adults’ professional development and earnings.

For example, the 2024 State of Economic Equity  reported that in 2022 the rate of depression in young adults, 18-24 years old, who are members of Generation Z, was over 12% compared with 8% for adults 25-64 years old. This difference can deepen economic disparities between the two groups.

Rise in Depression: Young Adults vs. Older Adults, 2010 to 2022

SOURCE: 2024 State of Economic Equity, which used data from the National Health Interview Survey (2010-22) and authors’ calculations.

NOTES: Young adults are ages 18 to 24. The 2022 group consists of members of Gen Z. Older adults are ages 25 to 64. Data show weighted mean values for the percentage of adult respondents who felt depressed monthly. Rates prior to 2019 should not be directly compared because survey calculations changed in 2019.

What do we know about the relationship between mental health and economic factors?

• A 2011 report from the Harvard School of Public Health and the World Economic Forum projected that the cost of mental illness globally would be $6 trillion by 2030. The most common disorder is depression, a 2022 article in Applied Health Economics and Health Policy found.
• Research from 2020 indicates that the economic cost per treated person (PDF) , which includes treatment costs as well as loss of productivity, equates to between $1,180 and $18,313, depending on the condition. Costs are lower per person for those with the most common conditions of depression or anxiety disorders.
• In the U.S., poorer work performance due to depression can cost a company an average of $5,524 per person per year , which also impacts afflicted individuals by limiting career progression, income growth and job stability.

Rent and Student Loan Debt as Economic Distress Factors for Young Adults 

Two potential sources of economic distress that might impact young adults’ mental health are rent costs and student loan debt. Just over 80% of young adults are renters, according to data from the U.S. Bureau of Labor Statistics.

According to a 2024 report on U.S. rental housing (PDF) from the Joint Center for Housing Studies of Harvard University:

• In the past 20 years or so, median rents have increased over 20% while median income has risen just 2%.
• Of the young adults who were household heads, 61% were cost burdened (spending more than 30% of their income on housing and utilities) in 2022.
• At the same time, unit shortages grew by 2.9 million units from 2001 to 2021, which means that there have been both increases in costs and fewer affordable rental units than in the past.

These challenges could result in young adults making financial sacrifices by cutting back in other spending categories to make ends meet or moving away from networks to find affordable housing. They could also result in the young adults not being able to pay their full rent.

The cost of housing, compounded with debt like that from student loans, can constitute a heavy financial burden. Tuition and board for a four-year college increased by 40% between 2001 to 2023, going from $22,118 in the 2000-01 school year to $30,884 in the 2022-23 school year, according to data from the National Center for Education Statistics. Median personal income has not kept pace, helping lead to student debt growth of over 230% between 2006 and 2020. Furthermore, after controlling for other types of debt, student loan debt was found to be negatively associated with life satisfaction and psychological well-being. In fact, student loan debt alone has been described as a significant motive for delaying family formation and decreasing homeownership depending on the level of debt.

Evolving Technology and Young Adults’ Mental Health

Another reason for the higher prevalence of depression among young adults may be certain types of internet use and interactions. Research has been emerging on gaming and social media effects on mental health. For instance, gaming disorder is now part of the International Classification of Diseases 11th Revision. The American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders Fifth Edition also established criteria for internet gaming disorder but recognizes it as a condition that needs additional research. While causality has not been determined, research shows that 1 in 3 individuals who have a gaming disorder also have depression. Furthermore, while it is not part of the diagnostic manual, social media use has been associated with depression in adolescents and young adults.

As the long-term effects of social media use are still being understood, we are experiencing the emergence of another technology with generative AI, a type of artificial intelligence. Already, teens deem it acceptable to use some generative AI platforms to write essays (20%), solve math problems (39%) and conduct research (69%). Many young adult students and workers may need to quickly adapt their behaviors, such as by regulating use to protect critical thinking skills, working to better discern fact from fiction, and finding uses to hone, rather than stifle, creativity. For instance, only 35% of adults ages 18-29 could demonstrate full awareness of AI in daily life. With the risk of deepfakes and misinformation, this could place both the mental health of young adults and the quality of their work at risk.

Additional research is needed to understand the impact of past and emerging technologies on mental health and their effects on worker productivity.

Young Adults Seek Access to Mental Health Care

In recent years, there has been an increase in the access that patients, such as those in rural areas , have to providers through telehealth. Psychiatry is one of the areas with the most prominent use of telehealth, according to a January 2019 American Medical Association article .

What about mental health care affordability? Progress has been seen in this area as well. Research has shown that after dependent coverage expansion for 19- to 25-year-olds in 2010, there was a modest 2.9% decrease in admissions of uninsured patients for inpatient admissions and emergency department visits for psychiatric disorders. Additionally, increases in the number of mental health providers accepting Medicaid (PDF) have improved affordability across many states. However, updated data could help with examining affordability as an issue for many young adults, whose income and wealth are generally much lower than those of adults as a whole and whose wages have been stagnant.

Data from the National Health Interview Survey provide an illustration of factors around mental health services. While rates prior to 2019 should not be directly compared because survey calculations changed in 2019, the proportion of young adults who saw a mental health provider increased and diverged from that of older adults since 2015, as can be seen in the first figure below.

Saw a Mental Health Care Provider: Young Adults vs. Older Adults

SOURCES: National Health Interview Survey (2010-22) and authors’ calculations.

NOTES: Young adults are ages 18 to 24. The 2022 group consists of members of Gen Z. Older adults are ages 25 to 64. Data show weighted mean values for the percentage of adult respondents who saw or talked to a mental health provider in the last 12 months. Rates prior to 2019 should not be directly compared because survey calculations changed in 2019.

At the same time, the share of young adults seeking treatment but not being able to afford it also diverged from that of older adults, as can be seen in the next figure.

Needed but Couldn’t Afford Mental Health Care: Young Adults vs. Older Adults

NOTES: Young adults are ages 18 to 24. The 2022 group consists of members of Gen Z. Older adults are ages 25 to 64. Data show weighted mean values for the percentage of adult respondents who needed mental health care but couldn’t afford it in the last 12 months. Rates prior to 2019 should not be directly compared because the survey calculations changed in 2019.

The statistics on young adults seeking and not being able to afford mental health care, coupled with their higher depression levels, suggest that while more young adults are seeking treatment and there have been efforts to improve affordability for young adults, they still are struggling to pay for treatment.

Young adults have a long work life ahead and are critical to tomorrow’s economy. Early adulthood is when the work from child-rearing and education (PDF)  come to a confluence where we can see young adults’ economic contribution. However, mental health issues can mean economic setbacks for the individual, family and the community as a whole. Research has shown that early prevention and early intervention can help lessen those setbacks. Perhaps through such measures, education and income disparities that emerge can also be reduced, thereby building a stronger economy for new generations.

Nicole Summers-Gabr is a senior researcher for the Institute for Economic Equity at the Federal Reserve Bank of St. Louis. Read about Nicole’s work .

Violeta Gutkowski is a lead analyst for the St. Louis Fed's Institute for Economic Equity. Read about Violeta's work .

Alice L. Kassens is the John S. Shannon Professor of Economics at Roanoke College and a research fellow at the St. Louis Fed's Institute for Economic Equity. Read more about the author and her work .

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MIT’s Master of Applied Science in Data, Economics, and Design of Policy program adds a public policy track

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MIT’s Abdul Latif Jameel Poverty Action Lab (J-PAL) and Department of Economics have announced an expansion of their jointly administered Master of Applied Science in Data, Economics, and Design of Policy (DEDP) program . This expansion adds a new public policy track to complement the existing international development track, opening up new avenues for student learning and research. 

Designed to tackle poverty alleviation and other pressing policy challenges in the United States and other high-income countries, the curriculum of the new track spans a diverse set of issues, from domestic concerns like minimum wage and consumer welfare to global matters including trade, climate change, and immigration. Applications for the public policy track will open this fall, with the inaugural cohort set to arrive on MIT’s campus in spring 2026.

The DEDP program, led by MIT professors and Nobel laureates Abhijit Banerjee and Esther Duflo, along with professors Sara Fisher Ellison and Benjamin Olken, was established with the mission of equipping diverse cohorts of talented professionals with the knowledge and skills to tackle poverty using evidence-based approaches. The new master’s degree track will support this mission while also underscoring the program’s commitment to addressing a broad array of critical challenges in the fight against poverty worldwide.

"The DEDP program has proven successful on many dimensions, and we are enthusiastic about leveraging its successes to address a broader set of social challenges,” says Ellison, a faculty lead for the program. “The public policy track will enable us to apply evidence-based methodology to poverty alleviation and other related issues in the context of high-income countries, as well. Given increasing levels of wealth and income inequality in these countries, we feel that the timing is opportune and the need is great."

The DEDP program distinguishes itself with an innovative admissions model that prioritizes demonstrated ability and motivation over traditional credentials, such as standardized tests and recommendation letters. To be eligible to apply to the master’s program, candidates must have earned a DEDP MicroMasters credential by passing five of the DEDP online courses. The courses are completely free to audit. Those who wish to earn a course certificate can pay a fee, which varies by the learner’s ability to pay, to take the proctored exam. While applications are reviewed holistically, performance in these classes is the primary factor in admissions decisions.

This approach democratizes access to higher education, enabling students from typically underrepresented backgrounds to demonstrate their potential for success. Notably, the program has welcomed many students from nontraditional backgrounds, such as a student who enrolled directly from high school (and who is now a second-year PhD student in economics at MIT), reflecting the ambition of its faculty directors to make higher education more accessible.

Sofia Martinez, a graduate of the class of 2023 and now co-founder of Learning Alliance , says, "Without the MicroMasters paving the way, applying to MIT or any similar institution would have been unthinkable for us. Initially, my aim in taking the online courses wasn't to pursue the residential program; it was only after witnessing my own progress that I realized the possibility wasn't so distant after all. This sentiment resonates with many in our cohort, which is truly humbling.”

Since its launch in 2020, the DEDP master’s program has conferred degrees to 87 students from 44 countries, showcasing its global reach and the success of its admissions model. Upon arriving on campus, students embark on an accelerated master's program. They complete a full course load in the spring, followed by a capstone project in the summer, applying the theoretical knowledge and practical skills gained through the program at research and policy organizations.

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Opinion: Income inequality is gutting the middle class

I care about economic inequality. I teach a class on it. I wrote  a book  about it. Yet, recently, two different arguments have popped up with a seemingly similar conclusion: economic inequality hasn’t risen as much as conventional wisdom would suggest.

While these two arguments have the same implication, they look at vastly different ends of the income distribution. 

The first  focuses on the bottom 20 percent of households by income and suggests an actual  reduction  in inequality. The point is that through increased government transfers, the bottom has actually caught up to the middle over the last 40 years. The  second argument  focuses on the top 1 percent of the income distribution. It argues that estimates of the top 1 percent’s share of income make assumptions that may overstate that share’s growth and thus the growth of inequality.

I don’t necessarily disagree with either of these arguments. Over the last 50 years, the social safety net has expanded in ways that  reduce poverty  and benefit the bottom 20 percent relative to the middle. And, because most surveys of household finances miss out on the top 1 percent, calculating their share of income is hard. It  requires assumptions , and those assumptions will yield different estimates of growth. While I don’t profess to know which group is right — the one saying  lots  of growth or the one saying  less  — I know enough to admit that I don’t know.

So, if I don’t disagree with these arguments, then why am I writing this? Because I think a focus on the poles of income distribution distracts from the real story: the stagnation of the middle over the last 50 years. Sure, the bottom has caught up to the middle partially because of government programs. But the other part of the story is that the bottom has also caught up because the middle hasn’t seen much income growth at all.

The figure below illustrates this point. It shows how GDP per capita, the median earnings of female versus male full-time workers and the median income of Black versus white households have grown since 1975. While per capita income in the U.S. nearly doubled over this period, the same can’t be said for anyone in the middle. 

The median working man saw his real income  decline . And, while the median working women saw increases, this is largely because their education and work experience expanded rapidly. In any case, despite these gains, they still couldn’t keep up with the economy’s growth nor catch up completely to men — the gender wage gap today sits around  83 percent .

At the household level, things aren’t great either. Median income for white households grew about 25 percent. Black households saw even less growth. That’s right, since 1975, the Black-white household income gap  has grown . And while those making the first argument above could fairly point out that my numbers do not account for non-cash safety net programs like food stamps or Medicaid, the median household isn’t getting these programs anyway.

These data contain questions about the economy that demand answers. Why aren’t labor markets providing any economic growth for middle-earning men? Why haven’t middle-earning women — despite massive increases in human capital — been able to outpace the economy? Why are households not seeing much growth despite large increases in women’s earnings and labor force participation? And why did Black households actually  lose  ground?

Economists know the answers to some of these questions.  Technology ,  trade  and the  increased power  of large businesses all likely play some role in holding down median wages. Women have to trade pay for  flexibility  due to caregiving responsibilities. The  decline of marriage  in the middle — at least partially fueled by the economic performance of men — means fewer two-income households than would have occurred otherwise. And Black households still face  discrimination , a damaging  human capital gap  and economic conditions that can make marriage  tougher  than it is for white households.

These issues demand some consideration. Should we plan for the impact of AI to prevent another four decades lost for middle earners? Would universal pre-K help kids do better and help moms work and earn more if they want? Do we want to change housing policy to improve opportunities for Black households to unstick the racial income gap? 

These conversations are worth having, but they won’t be had if people think incorrectly that the issue is settled.

Geoffrey Sanzenbache r is an associate professor of the practice at Boston College, where he teaches a class called The Economics of Inequality. He is also a research fellow at The Center for Retirement Research at Boston College.

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