Economic inequality

Economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. Economic inequality is sometimes called income inequality, wealth inequality, or the wealth gap. Economists generally focus on economic disparity in three metrics: wealth, income, and consumption. The issue of economic inequality is relevant to notions of equity, equality of outcome, and equality of opportunity.

Economic inequality varies between societies, historical periods, economic structures and systems. The term can refer to cross-sectional distribution of income or wealth at any particular period, or to changes of income and wealth over longer periods of time. There are various numerical indices for measuring economic inequality. A widely used index is the Gini coefficient, but there are also many other methods.

Some studies say economic inequality is a social problem. E.g., too much inequality can be destructive, because it might hinder long term growth. Too much income equality is also destructive since it decreases the incentive for productivity and the desire to take-on risks and create wealth. According to a 2017 Oxfam report, just eight people own as much combined wealth as "half the human race".

The first set of income distribution statistics for the United States covering the period from (1913–1948) was published in 1952 by Simon Kuznets, Shares of Upper Income Groups in Income and Savings. It relied on US federal income tax returns and Kuznets’s own estimates of US national income, National Income: A Summary of Findings (1946). Others who contributed to development of accurate income distribution statistics during the early 20th century were John Whitefield Kendrick in the United States, Arthur Bowley and Colin Clark in the UK, and L. Dugé de Bernonville in France.

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