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4.2, POVERTY AND INEQUALITY - Coggle Diagram

- - - - What is it?
        
        A measure of the income (or wealth) inequality within a country
      - How is it measured?
        
        OECD and EU measure it as below 60% of median earnings
      - As income inequality rises, so does relative poverty
      - Causes
        
        Unemployment
        
        Part time work instead of full time (possibility of underemployment – lack of labour demand in recessions)
        
        Discrimination – e.g. Gender pay differences
        
        Disparities in skills – natural or through education
        
        Lack of wealth – vicious cycle
        
        Low level of welfare benefits – linked to prices rather than incomes
        
        Regressive taxation
        
        Inflexibility in labour market (e.g. poor mobility)
        
        Regional disparities – e.g. Structural unemployment
        
        Poverty trap
  - - - Lorenz curve
        
        shows the distribution of income in an economy
      - GINI coefficient
        
        a numerical measure of income inequality based on the Lorenz curve GINI = A/ (A+B)
  - - - Homelessness
      - Inability or unwillingness to claim welfare benefits
      - Wars
      - Famines
      - Natural disasters
      - Lack of economic development
      - Low level of economic welfare from government