Inequality

Relationship Between Equality and Equity (AO2)

Equity means economic fairness. In other words, people who work harder jobs that require more skills earn a higher wage, in order to incentivize work. This creates inequalities, as some will earn more than others.

Equality, on the other hand, means everyone earns the same amount, ensuring no inequalities exist.

The Meaning of Economic Inequality (AO2)

There are 2 types of economic inequality:

• Unequal distribution of income: There are inequalities present in people's income in a society

• Unequal distribution of wealth: There are inequalities present in people's wealth in a society

Both can obviously affect the other.

Both income and wealth inequality can be illustrated using the Lorenz Curve and Gini Coefficient.