Income Inequality

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DEFINITION of 'Income Inequality'

The unequal distribution of household or individual income across the various participants in an economy. Income inequality is often presented as the percentage of income to a percentage of population. For example, a statistic may indicate that 70% of a country's income is controlled by 20% of that country's residents.

It is often associated with the idea of income "fairness". It is generally considered "unfair" if the rich have a disproportionally larger portion of a country's income compared to their population.

INVESTOPEDIA EXPLAINS 'Income Inequality'

The causes of income inequality can vary significantly by region, gender, education and social status. Economists are divided as to whether income equality is ultimately positive or negative and what are the implications of such disparity.

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