Wealth disparity, commonly referred to as the wealth gap, is a quantitative reflection of the distribution of wealth. It essentially summarizes the wide gap between the most affluent individuals and the least privileged in a given region, be it a nation, state, city or demographic cluster.
The issue of wealth inequality shows a strong correlation with income inequality, which is a barometer of individual earnings. However, wealth inequality encompasses more than just income, taking into account the value of bank accounts, stocks, investments, real estate, and personal property such as vehicles, jewelry, art, and other valuables. It is a prominent driver of unequal living standards in numerous communities.
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List of the top 10 countries by wealth inequality in 2023
The research findings reveal a paradoxical trend in which globalization has eased global wealth inequality internationally, while exacerbating it within national borders. Typically, less developed countries show more pronounced inequality compared to their more advanced counterparts. The following is a list of nations that are witnessing increased wealth inequality:
1. Republic of South Africa – 63.0%2. Namibia – 59.1%3. Suriname – 57.9%3. Zambia – 57.1%4. Sao Tome and Principe – 56.3%5. Central African Republic – 56.2%6. Eswatini – 54.6%7. Mozambique – 54.0%8. Brazil – 53.4%9. Botswana – 53.3%
This list is based on the GINI index, a summary measure of income inequality. The Gini coefficient consolidates comprehensive data into a single statistic, summarizing the spread of income across the entire income spectrum.
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Countries with the greatest wealth inequality in 2023
Nine of the top 10 nations on this list are located in Europe or at the junction of Europe and Asia (Azerbaijan). The top 1% in Europe claim only 12% of total income, while the bottom 50% have a 22% share of income. By contrast, in the United States, the country with the most billionaires in the world, the top 1% earn 20% of the income, while the lowest-earning 50% provide only 10%. Reduced inequality and increased equality in Europe can be attributed to the continent’s firm commitment to preserving a non-market society, where market forces do not have undue influence on sectors such as education, healthcare and wages. Notable examples include social welfare systems and more favorable labor markets.
Over the years, income inequality in South Africa has intensified. The top 1% of earners now claim nearly 20% of total income, with the top decile securing 65%. In contrast, 90% of income earners in South Africa have barely 35% of total income. Income distribution in South Africa remains marked by racial, gender and spatial disparities, with white men having better job and income prospects, women earning approximately 30% less than their male counterparts, and urban workers earning roughly twice the income of their peers from rural areas.
For many African nations, income inequality is deeply rooted in their economic structure. A select few high-income sectors generate significant wealth, but this wealth is concentrated among a limited number of individuals. Meanwhile, the majority of the workforce is entrenched in lower-income sectors, earning significantly less.
These disparities are often exacerbated by flawed education systems that fail to train all but the wealthiest citizens for higher-paying skilled positions, and by the presence of corrupt or oppressive governments. Furthermore, while several countries in eastern and southern Africa possess abundant resources, both natural and human, many other African nations struggle with a lack of necessities such as arable land and clean water, which can hinder overall economic progress.
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What is the GINI coefficient?
The Gini index, also known as the Gini coefficient, serves as a metric for measuring the distribution of income within a population. Conceived by the Italian statistician Corrado Gini in 1912, it primarily functions as a gauge of economic difference, measuring income or, to a lesser extent, the distribution of wealth among the population.
The coefficient ranges from 0 (which represents perfect equality) to 1 (which represents absolute inequality). Theoretically, values greater than 1 are possible due to negative income or wealth. In a nation where every resident earns the same income, the Gini coefficient of income would be 0. In contrast, a nation in which one individual monopolizes all the income, leaving nothing for others, would have a Gini coefficient of income of 1. In rich countries, the Gini index estimates the net income rather than net worth, allowing a disproportionate share of the nation’s wealth to be concentrated in the hands of a select few, even if the distribution of income appears relatively even.
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Categories: Trends
Source: HIS Education