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Causes and Consequences of Income Inequality – An Overview

Author

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  • Polacko Matthew

    (Département de science politique, Université du Québec à Montréal, Montréal, Québec, Canada)

Abstract

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.

Suggested Citation

  • Polacko Matthew, 2021. "Causes and Consequences of Income Inequality – An Overview," Statistics, Politics and Policy, De Gruyter, vol. 12(2), pages 341-357, December.
    • Handle: RePEc:bpj:statpp:v:12:y:2021:i:2:p:341-357:n:11
    DOI: 10.1515/spp-2021-0017
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    Cited by:

    1. Abebe Gule Girma & Fariz Huseynov, 2023. "The Causal Relationship between FinTech, Financial Inclusion, and Income Inequality in African Economies," JRFM, MDPI, vol. 17(1), pages 1-15, December.

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