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Democratic South Africa was born amidst high hopes for the reduction of income poverty and inequality from their high levels under apartheid. The reality has been disappointing: despite steady economic growth, income poverty probably rose in the late 1990s before a muted decline in the early 2000s, income inequality has probably grown, and life expectancy has declined. The proximate causes are clear: persistent unemployment and low demand for unskilled labour, strong demand for skilled labour, an unequal education system, and a social safety net that is unusually widespread but nonetheless has large holes. It is also clear that economic growth alone will not reduce poverty or inequality. Pro-poor social policies are important, but not as important as a pro-poor economic growth path. Unfortunately, there is little sign of the political conditions changing to push the state towards the promotion of a more pro-poor pattern of economic growth. There is some chance of parametric reforms of the welfare state. Overall, however, it is likely that, after another ten years of democracy, unemployment and poverty rates will remain high, despite significant redistribution through cash transfers, and incomes will continue to be distributed extremely unequally.

This paper addresses the question of how greater equality by gender and race/ethnicity in the distribution of earnings would affect earnings inequality in Sri Lanka. The decomposition exercise of male-female earnings indicates the significant extent to which the gender disparity in earnings represents 'discrimination' against women. The findings showed that men had higher average earnings that attributed fully to discrimination in favour of male earners. Despite commendable achievements in social indicators, it is imperative to address persistent ethnic and gendered inequalities in order to maintain social and political cohesion.

This paper argues that after a quarter century of sharp and sustained increase, Chinese inequality is now plateauing and even turning down. The argument is made using a range of data sources and a range of measures and perspectives on inequality. The evolution of inequality is further examined through decomposition by income source and population subgroups. Preliminary explanations are provided for these trends in terms of shifts in policy and structural transformation of the Chinese economy. The narrative on Chinese inequality now needs to focus on the reasons for this great turnaround.

An introduction to an area of growing analytical and policy importance: spatial and regional inequality, which can create tension and instability in developing and transition economies. Drawing on data from 25 countries from around the world, it answers the following key questions: What exactly is spatial inequality? Why does it matter?

Research on wealth inequality and accumulation and the data upon which it relies have expanded substantially in the twenty-first century. Although the field has experienced rapid growth, conceptual and methodological challenges remain. We begin by discussing two major unresolved methodological concerns facing wealth research: how to address challenges to causal inference posed by wealth's cumulative nature and how to operationalize net worth given its highly skewed distribution. Next, we provide an overview of data sources available for wealth research. To underscore the need for continued empirical attention to net worth, we review trends in wealth levels and inequality and evaluate wealth's distinctiveness as an indicator of social stratification. We then review recent empirical evidence on the effects of wealth on other social outcomes, as well as research on the determinants of wealth. We close with a list of promising avenues for future research on wealth, its causes, and its consequences.

Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as heterogeneity in ability to learn, initial human capital, and initial wealth. We find that, as of age 23, differences in initial conditions account for more of the variation in lifetime earnings, lifetime wealth, and lifetime utility than do differences in shocks received over the working lifetime. (JEL D31, D91, J24, J31)

Among the advanced industrial nations, the United States has the most unequal distribution of income. Douglas Massey emphasizes that the purchasing power of households in the top five percent of the income distribution rose sharply from the early 1980s to 2000 while the purchasing power of those in the bottom twenty percent of the income distribution remained constant—proving a much larger economic gap between rich and poor households. This book summarizes an extensive array of studies from a variety of disciplines and cogently describes federal policies that promoted income disparity. Many sections of this book provide lucid information about the changing status of women, shifts in racial disparities, and the consequences of immigration from Mexico. It is not, however, a definitive book about inequality in this nation.

We examine the relationship between technological complexity and wage inequality, using an efficiency wage model that adopts Kremer's O‐ring production function. The model has two main implications: (i) when the production process becomes more complex, within‐task wage differences increase between plants, and (ii) between‐task wage differences increase within plants. We study these implications empirically using industry data providing quantified information on the complexity of the tasks. We find that wages increase in all the tasks with the complexity of the production process. Furthermore, the relationship between the complexity of the tasks and wages is steepest in the firms with more complex production processes.

AbstractInequality is on the rise: gains have been concentrated with a small elite, while most have seen their fortunes stagnate or fall. Despite what scholars and journalists consider a worrying trend, there is no evidence of growing popular concern about inequality. In fact, research suggests that citizens in unequal societies are less concerned than those in more egalitarian societies. How to make sense of this paradox? I argue that citizens' consent to inequality is explained by their growing conviction that societal success is reflective of a meritocratic process. Drawing on 25 years of International Social Survey Program data, I show that rising inequality is legitimated by the popular belief that the income gap is meritocratically deserved: the more unequal a society, the more likely its citizens are to explain success in meritocratic terms, and the less important they deem nonmeritocratic factors such as a person's family wealth and connections.