Carter Allen, Anthony Perfetti, and Prabjeet Singh
Carter Allen, Anthony Perfetti, and Prabjeet Singh
Introduction
Income inequality refers to how the income is unevenly distributed within the population. Thus, higher income inequality means the less equal the distribution of wealth. Income inequality has been a significant policy issue in the United States of America. A rise in income inequality is often viewed as a society divided between rich and poor people who have resources and people who don’t. This somewhat invokes an image of political repercussions and injustice, maybe even social unrest. We researched income inequality trends in the United States of America to observe how income inequality has changed and impacted America over time and analyze its current state. Building on historical analysis, racial income inequality has always been an issue in American history. In our paper, we conduct a deep-dive research of the correlation between income inequality and race. We also look into various factors that lead to this racial income gap and analyze why some racial groups earn more than the others in the US and the best approach to decreasing this racial income inequality.
Income inequality has continuously been researched concerning gender and race. There is a concern for understanding the relationship between income inequality and domestic violence. Many studies have been done to find conclusive evidence on the relationship between domestic violence and income inequality. Next, gender income inequality has become an issue recently, specifically regarding the pay gap. Female participation in the workforce has been studied as it relates to the economy as a whole. Women have been discriminated against as it relates to high-wage jobs; this discrimination accelerates income inequality in the whole economy. We will discuss how this impedes economic growth for everyone. The next portion of this chapter compares and contrasts the relationships of income inequality and other economic factors between more and less developed countries. The purpose of this section is to stress the importance of variables such as financial development, the development of human capital, the impact of government policy, and the connection between income inequality and economic growth overall. These factors share their own independent relationships with income inequality; however, they are all interconnected. This interaction between factors makes each increasingly crucial in their own way as a negative impact on one variable will ultimately carry negative implications to the other connected factors. This portion of the chapter will expand on how these variables and their connectivity play a role in the resulting level of income inequality between countries with different levels of economic well being. The relationship between financial development and income inequality will focus on the importance of financial intermediaries for providing investment opportunities and removing information asymmetry. Next, examining the im