Kaarten: Chapter 5 poverty and inequality | Quizlet

What is the Gini coefficient?

The Gini coefficient measures income inequality, where 0 represents perfect equality and 1 represents perfect inequality. It is calculated using the Lorenz Curve as the ratio of the area between the line of perfect equality and the observed Lorenz curve to the total area under the line of perfect equality.

What is the Kuznets Curve?

The Kuznets Curve describes how inequality first rises and then falls with economic development, forming an inverted U-shape. It links income inequality to per capita income during industrialization.

What role did the welfare state play in reducing inequality during the 20th century?

The welfare state redistributed wealth through social spending, progressive taxation, and social security, significantly reducing inequality between 1900 and 1980.

What is the inequality extraction ratio?

It is the actual measured Gini coefficient as a percentage of the maximum Gini that a society can sustain, indicating how much wealth is extracted by elites from the lower classes.

How did industrialization initially affect intra-national inequality?

Industrialization initially increased inequality as the top 10% gained more wealth, but later policies and social reforms reduced inequality.

What are the limitations of the Gini coefficient?

The Gini coefficient does not reveal the exact distribution of income or average incomes, and it may hide significant social realities, especially in low-income countries.

What is the "inequality possibility frontier"?

It represents the maximum inequality a society can sustain, which increases with economic growth as higher-income societies can support greater inequality without destabilizing.

How did democratization impact inequality in industrialized countries?

Democratization gave workers voting rights, leading to social and economic reforms that reduced inequality, such as the establishment of welfare states and labor laws.

What are the primary causes of rising intra-national inequality after 1980?

Causes include stagnation of social spending, weakened labor unions, deindustrialization, tax reforms favoring the wealthy, and globalization.

What is "trickle-down economics"?

It is the idea that policies favoring the wealthy, such as tax cuts, will eventually benefit lower-income groups through investments and economic growth.

Why is global inequality still high despite progress in some areas?

Global inequality remains high due to persistent intra-national inequality, historical factors like colonialism, and unequal distribution of resources and opportunities.

What are the three types of inequality highlighted?

1) Intra-national inequality2) International inequality3) Global inequality (a combination of the first two).

What is the role of industrialization in inequality?

Industrialization initially increased inequality but later contributed to wealth equalization through policies and social reforms.

What role do labor unions play in reducing inequality?

They strengthen workers' bargaining power, leading to better wages and working conditions.

What happened to inequality after 1980?

Intra-national inequality rose again due to weakened welfare states, globalization, and tax reforms favoring the wealthy.

What are the historical phases of inequality trends?

Pre-1900: Rising intra-national and international inequality.

1900-1980: Decline in intra-national inequality in industrialized nations.

Post-1980: Rising intra-national inequality globally.

How did industrialization affect class systems?

It shifted inequality from rank-based (pre-industrial) to class-based, focused on ownership of production vs. labor.

What is global inequality's relationship with climate change?

The wealthiest contribute disproportionately to CO2 emissions, exacerbating environmental inequality.

What role did social insurance play in reducing inequality?

It provided protections such as pensions, sickness insurance, and unemployment benefits, starting in the late 19th century.

Why is the welfare state under pressure today?

Declining state revenues, rising public debt, and neoliberal policies have reduced its effectiveness.

What is the impact of globalization on inequality?

It has increased competition, reduced labor bargaining power, and widened income gaps within countries.

What are the lecture's concluding thoughts on inequality?

Without stronger redistributive measures, rising intra-national inequality may undermine global progress despite reductions in extreme poverty.