Economic inequality (or "wealth and income differences") comprises all disparities in the distribution of economic assets and income. The term typically refers to inequality among individuals and groups within a society, but can also refer to inequality among countries. The issue of economic inequality is related to the ideas of equity: equality of outcome andequality of opportunity. The main instrument which diminishes economic inequality,progressive taxation, has been demonstrated to be effective in international comparisons of income compression and wealth distribution.
It is a contested issue whether economic inequality is a negative phenomenon, both on utilitarian and moral grounds. A book published in 2009 claims that negative social phenomena such as shorter life expectancy, higher disease rates, homicide, infant mortality, obesity, teenage pregnancies, emotional depression and prison population correlate with higher socioeconomic inequality.
Economic inequality has existed in a wide range of societies and historical periods; its nature, cause and importance are open to broad debate. A country's economic structure or system (for example, capitalism or socialism), ongoing or past wars, and differences in individuals' abilities to create wealth are all involved in the creation of economic inequality.
Economic inequality can decline or increase over time. For example in many countries, inequality increased in the early stages of economic development as investment opportunities increased the income of those with capital while an influx of cheap rural labor to the cities held down wages. In later stages, a maturing investment market, organization of labor and lower rates of rural migration may lower the level of inequality.
There are various numerical indices for measuring economic inequality. Inequality is most often measured using the Gini coefficient, but there are also many other methods.
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