Income inequality and its causes. Indicators of income inequality of the population.

Differences in the level of income per capita or per employed person are commonly referred to as income differentiation. Income inequality is common to all economic systems, but to varying degrees. The traditional system has the largest income gap. It gradually decreased in the transition to free competition capitalism and decreased markedly in the transition to the modern market system. A significant increase in income inequality is noted during the transition from the administrative-command to the market system. This is due to the fact that part of the population continues to live under the conditions of the decaying former system, and at the same time, a social stratum arises that operates according to the laws of a market economy. But over time, the size of inequality is reduced due to the involvement in market relations of ever wider sections of the population.

Income and wealth inequality can be enormous and threaten political and economic stability in a country. For this reason, almost all developed countries of the world are constantly implementing measures to reduce such inequalities. But the development of these measures is possible only with the ability to accurately measure the degree of differentiation of income and wealth, as well as the results of influencing it with the help of public policy.

People earn income as a result of creating their own business (becoming entrepreneurs), or providing the factors of production that they own (their labor, land or capital) for the use of other people or firms. And they use this property to get the benefits people need. In such a mechanism of income formation, the possibility of their inequality was initially laid down. The reason for this is:

Different values of factors of production owned by people (capital in the form of a computer, in principle, is able to generate more income than capital in the form of a shovel);

Different success in the use of factors of production (for example, an employee in a firm that produces a scarce product may receive higher earnings than his counterpart of the same qualification working in a firm whose goods are sold with difficulty);

Different amounts of factors of production owned by people (the owner of two oil wells receives, other things being equal, more income than the owner of one well).

Building on this, it is essential to touch on human capabilities in order to understand the causes of income inequality.

First of all, from birth, people are endowed with various abilities, both mental and physical. Other things being equal (this premise must always be kept in mind), a person endowed with exceptional physical strength is more likely to become a famous and highly paid athlete.

Secondly, differences in ownership of property, especially inherited property. People cannot choose in which family they are born - hereditary millionaires or ordinary workers. Therefore, one of the varieties of the income stream, ᴛ.ᴇ. income from property will vary significantly among the subjects we have named.

Thirdly, differences in educational level. This reason itself largely depends on those mentioned above. A child born in a wealthy family is more likely to receive an excellent education and, accordingly, a profession that brings a high income than a child in a poor family with many children.

Fourth, even with equal opportunities and the same starting conditions for education, people who are sometimes called ʼʼworkaholicsʼʼ will receive more income. These people are ready for a lot, just to achieve high results in their work.

Fifthly, there is a group of reasons that are simply related to luck, chance, unexpected gain, etc. in the conditions of uncertainty that characterizes a market economy, this group of causes can explain many cases of inequality in income distribution.

Various indicators are used to quantify income differentiation. But in order to assess the level of inequality in society and develop an effective state policy, indicators of the factorial distribution of income are not enough, because the level of income concentration in certain groups of the population is not visible, ᴛ.ᴇ. it refers to the personal distribution of personal income among families or individuals. For this, it is extremely important to divide the total number of families by income level into 5 groups equal in number of families. The first 20% of families include families with low incomes, the second 20% include families with higher incomes than in the first group, etc. Consequently, the fifth group will include 20% of families with the highest incomes in the country.

For a graphical representation of the personal distribution of national income, a Lorenz curve is constructed (Fig. 1.).

When plotting the curve, the percentages of families with the corresponding percentage of income are plotted along the abscissa axis, and the percentages of incomes of the families under consideration are plotted along the ordinate axis. The theoretical possibility of a perfectly equal distribution of income is represented by the bisector, which indicates that any given percentage of families receive a corresponding percentage of income. This means that if 20, 40, 60% of families receive, respectively, 20, 40 and 60% of the total income, then the corresponding points will be located on the bisector. The Lorenz curve is a cumulative distribution of the population and the corresponding incomes. As a result, it shows the ratio of the percentage of all income and the percentage of all their recipients. In the event that incomes were distributed evenly, ᴛ.ᴇ. 10% of the recipients would have a tenth of the income, 50% - half, etc., then such a distribution would look like a line of uniform distribution (oe).

The uneven distribution is characterized by the Lorenz curve, ᴛ.ᴇ. the line of actual distribution (oabcde), which is further away from the straight line, the greater the differentiation. For example, the bottom 20% of the population received 5% of the total income, the bottom 40% received 15%, and so on. The area between the absolute equal distribution line and the Lorenz curve indicates the degree of income inequality: the larger this area, the greater the degree of income inequality. If the actual distribution of income were absolutely equal, then the Lorentz curve (oabcde) and the bisector (oe) would coincide.

To characterize the distribution of total income between population groups, the population income concentration index (Gini coefficient), named after the Italian statistician and economist Corrado Gini (1884-1965), is used.

The Gini coefficient is equal to the ratio of the area of \u200b\u200bthe figure bounded by the Lorentz curve to the area of the triangle under the same curve, or

I Gini = S0abcde

The larger this coefficient, the stronger the inequality, ᴛ.ᴇ. the higher the degree of polarization of society in terms of income, the closer the Gini coefficient is to 1. when incomes are equalized in society, this indicator tends to 0. It should be noted that this coefficient cannot be equal to either 1 or 0, because a civilized market economy eliminates such extremes due to the purposeful redistribution of income.

The volume of income of each interval group is determined on the basis of the distribution curve of the population in terms of average per capita income by multiplying the middle of the income interval by the population in this interval.

Along with the Gini coefficient, to characterize income differentiation in society, the coefficient of funds or the decile coefficient of income differentiation is used, which shows how large the income gap is between the most distant groups of the population that have the same share in the total: 10% with the lowest incomes and 10% - with the highest. World practice shows that the income differentiation coefficient should not exceed the critical limit ratio of 10:1; in Russia, this ratio, which reflects only legal income taken into account by statistics, was 15:1 in 2006, ᴛ.ᴇ. 5 points higher than allowed. If shadow incomes are taken into account, this coefficient will be even higher.

The formation of a market economic system and the formation of a layer of owners on this basis will inevitably increase the influence of the principle of distribution according to accumulated property. At the same time, the formation of the total income of the population will contribute to the growth of income differentiation and the social stratification of society, the formation of a layer not only of the rich, but also of the poor, which will require active state intervention to overcome social tension.

The resolution of such an acute social problem as poverty is one of the activities of the state and is associated with support at the level of at least a living wage for those who could not provide themselves with a better life. Otherwise, the growth in the number of poor people is fraught with social explosions and instability in the life of society. Reducing the number of poor people is one of the basic tasks of the state's social policy in market economy countries. But the practical implementation of the income equalization policy involves the expansion of complex problems. The state, taking responsibility for the social climate, sometimes faces extremely contradictory public perceptions of its actions. The fact is that for the successful implementation of socio-economic measures, considerable financial resources are needed. Their sources are taxes. Hence the pattern: the higher the size of social benefits, the tougher the taxation should be. This dependence was aptly formulated by L. Erhard: “The increase in the standard of living to which I aspire is not so much a problem of distribution as of production, or rather productivity. The solution lies not in dividing, but in multiplying the national output. Those who pay their attention to the problems of distribution always come to the erroneous desire to distribute more than the national economy is able to produceʼʼ (L. Erhard. Welfare for all. M., 1991. - p. 205). But a dynamically developing economy makes it possible to collect taxes at relatively preferential rates and at the same time receive large enough amounts of funds for social purposes. In modern Western countries, the profitability of the economy as a whole is quite high, which allows the governments of these states to carry out effective social programs, thereby ensuring a favorable social situation conducive to dynamic development.

It should also be noted that differences in the level of consumption may also depend on factors that are not related to the internal properties of labor and its quality in the worker himself. First of all, such factors include: family size, the ratio of the number of employees and dependents in the family, health status, geographical and climatic conditions.

The fundamental target function of the redistribution of the national income of the state is to reduce these differences and provide more favorable conditions for material life for all members of society. The form of realization of this goal is the distribution of products and services, transfer payments, as well as government programs to stabilize incomes.

Assistance program payments are designed to mitigate differences in income levels caused not by differences in work, but by causes outside the labor process itself, and also to help meet a number of needs that are most important in terms of the tasks of forming the ability to work, developing the personality, achieving more high educational and cultural levels, affordable healthcare, pensions. But since this form of distribution affects the interests of society as a whole and of each of its members individually, the state policy in this area should be especially active.

The problems of inequality in income distribution and social policy of the state again became the subject of lively theoretical discussions in the late 70s and early 80s, during the neoconservative shift in state regulation (ʼʼReaganomicsʼʼ, ʼʼThatcherismʼʼ). The essence of the problem is as follows: what are the limits of state intervention in redistribution processes? Is the efficiency of the economy as a whole decreasing due to the growing scale of transfer payments - after all, the source is taxes? Are increasingly progressive tax rates undermining incentives for entrepreneurship? Don't social programs contribute to the growth of the layer of social dependents? The American economist P. Heine notes: indeed, people who own yachts are rich, people who rummage through garbage cans are poor. But if new rules are passed whereby each yacht owner is subject to an annual tax of $10,000 into a special ʼʼhelpersʼʼ fund, and if each of the ʼʼhelpersʼʼ becomes eligible for an annual allowance of $2,000 from this fund, then rather All in all, the following will happen: the number of owners of registered yachts will decrease, and the number of "helpers" will increase surprisingly quickly (Heine P. Economic way of thinking. M., 1991. - p. 379).

We must not forget that income inequality is largely generated by the objective operation of the market price mechanism. The desire to completely destroy the differentiation of income would mean the intention to completely destroy the market mechanism itself.

Τᴀᴋᴎᴍ ᴏϬᴩᴀᴈᴏᴍ, the social policy of the state in a market economy should be a very subtle tool, on the one hand, it is designed to promote social stability and alleviate social tensions, and on the other hand, in no way undermine the incentives for entrepreneurship of highly effective wage labor.

Income inequality and its causes. Indicators of income inequality of the population. - concept and types. Classification and features of the category "Income inequality and its causes. Indicators of population income inequality." 2017, 2018.

The problems of inequality in Russia have become the subject of active public discussions over the past decade, led by economists, sociologists and representatives of other sciences. Inequality in incomes of the population is formed as a result of a complex interaction of factors that characterize the economic, social and geographical situation. The growing gap between the rich and the poor is causing significant social tensions, since for a population that has lived for many decades in conditions of equalization and state distribution, the well-being of new groups seems doubtful from an ethical, social and legal point of view. In the mass consciousness, the idea remains that a relatively homogeneous society in a fairly short period, called "transitional", has turned into a society with one of the highest levels of inequality. Russia has had too little time to adjust to the rapidly growing income and wealth inequality. Only a small fraction of the population has been able to achieve economic success, while the standard of living of the average Russian has dropped significantly. Although people have gained more political freedom, they have paid a high price for it.

The rapid rise in unemployment, as well as the decline in wages and pensions, combined with high inflation, pushed millions of people below the poverty line in the 1990s.

Income differentiation is inherent in any economy, but its excessive level is unacceptable, therefore it is important to know how inequality is formed, what factors, reasons, to what extent affect the differences in the amount of money income.

In order to effectively respond to differentiation in income distribution, economic and social policy should be based on how this differentiation is formed, which groups of the population, as a result of changes in income, make the greatest contribution to the dynamics of inequality.

Strengthening differentiation can occur in two forms. First, in the form of polarization, when the poor get poorer and the rich get richer. Secondly, in the form of unipolar dynamics, when either the poor get poorer or the rich get richer while maintaining a relatively stable position on the income scale on the scale of other income groups.

In Russia, a high degree of differentiation has developed in conditions of a relatively low average per capita income and, therefore, has led to an increase in the number of poor people in the country. Tension in society, as practice shows, is caused not by income differentiation, but by their low level.

1.3 Causes of income inequality

The causes of income inequality are:

1. Hereditary causes, such as the availability of resources, abilities and the presence of giftedness;

2. Human capital in the form of professional qualities, experience in any activity, level of education. These factors are not innate, but are acquired by the individual in the course of his life;

3. Labor efforts of employees, their interest in work;

4. Presence or absence of market discrimination;

5. Luck and other factors influencing decisions made by an economic entity and determining the result of its activities;

6. different values of factors of production owned by people (capital in the form of a computer, in principle, is able to bring more income than in the form of a shovel);

7. different success in the use of factors of production (for example, an employee in a firm that produces a scarce product may receive higher earnings than his counterpart of the same qualification working in a firm whose goods are sold with difficulty);

8. different amount of factors of production owned by people (the owner of two oil wells receives, other things being equal, more income than the owner of one well).

In addition, the distribution of income is greatly influenced by the structural features of the economy: the state of industries, the market situation, the degree of monopoly, the development of international relations, as well as the structure of exports and imports.

The territorial differentiation of monetary income is interpreted as a process and as a result of the formation of differences between individual territories of the country - large economic regions, regions - subjects of the Russian Federation, urban and rural settlements. Multidimensional and structurally diverse territorial differences in their totality determine the state of the regional environment. Their management at the federal, regional, local levels will make it possible to quickly overcome the excessive lag of individual regions of the Russian Federation in terms of the level and quality of life of the population. It can be seen that over the years of reforms, the gap in per capita income between the top 10% and the bottom 10% of the population of Russia has increased from a ratio of 4: 1 to 16.8: 1 (and according to some estimates that take into account hidden incomes, much more ) 3 .

The study of the income of the population is carried out on the basis of micro- and macroeconomic approaches, while distinguishing between the income of the household and the income of the population.

Differentiation of income indicates the degree of differences in the shares of each member of society in social income. Differentiation relations express the inevitable social differences in groups and categories of the population, depending on the role of each of them in social production, the appropriation of its results, the nature of labor activity, lifestyle characteristics, interests, etc. 4

Thus, our analysis leads to the conclusion that in modern conditions the growth of wealth not only does not depend on the abstinence of wealthy people, as is usually thought, but, most likely, is restrained by it. One of the main social justifications for large inequalities in the distribution of wealth is therefore dropped. I am not saying that there are no other causes, not covered by our theory, which can, in certain circumstances, justify a certain degree of inequality. But this removes one of the most important reasons why we have hitherto considered it necessary to proceed with great caution. This is especially true of our attitude to inheritance tax, since some of the considerations in favor of income inequality clearly do not apply to the same extent to inheritance inequality.

The cost-production method for determining GDP reveals the amount of total expenditure as a factor that directly affects the levels of production, employment and income. Although the method of withdrawals and injections (S = Ig) is not so straightforward, its advantage is that it explains the reason for the inequality of C + Jg and GDP at all levels of production, except for equilibrium.

In Chapter 31, we will continue our analysis of the role of the state, its failure, and the problems of taxation at the microeconomic level. The subsequent chapters of Part VII deal with the economic problems that the state has tried with more or less success to solve, Chapter 32 examines the problems of monopolies and anti-competitive practices of companies, Chapter 33 deals with agricultural problems, Chapter 34 deals with poverty and income inequality, and Chapter 35 deals with the health care system that has been talked about so much in the American media. Chapter 36 deals with aspects of the labor market such as trade unionism, discrimination and migration. The better you understand the material presented in chapters 30 and 31, the easier it will be for you to understand the reasons for government intervention in these areas of the economy.

There are three important reasons for the existence of income inequality - unequal personal opportunities differences in the nature of external social factors. The first factor depends solely on luck - some people have high intelligence, certain talents or physical dexterity that allow them to receive high incomes. In addition, they may inherit property or be helped by the social status and financial resources of their parents. The second reason involves personal initiative—individuals may want to get expensive education, take risks, or accept unpleasant working conditions in the expectation of higher pay. They can also show high personal initiative in business. The third factor relates to society as a whole. Market power and discrimination are two important social factors that determine the uneven distribution of income.

Several major themes are developed most intensively in radical economic theory. Among them are inequality of income, capital and power. The analysis of inequality goes beyond the contradictions between capitalists and workers and considers intra-class differences between social groups from unskilled workers to the managerial elite. It is argued that while inequality may be a necessary consequence of resource scarcity, developed economies now lack any reason for the existence of scarcity, which in advanced capitalism is artificially created, such as through advertising, so that there is no longer a need for in significant disparity. Radical economics advocates a reasonable minimum income for all, often just a benefit without the obligation to work, and a large number of free essentials.

As the analysis of the listed causes of inequality in the distribution of income shows, they are both objective and subjective. What should society strive for to equalize incomes or to differentiate them?

Causes of Income Inequality

The reason for the disparity is the regulation of rents by the City of New York. The city budget deficit is 2.3 billion - the largest in the last 20 years. The city's property tax revenues are currently estimated to be around 100 mln as rent pressures are holding back cash flow and therefore the appraised value of rental buildings. Critics also argue that the restrictions discourage new housing development and force owners - and indirectly taxpayers - to subsidize tenants who are lucky enough to get a rent-regulated apartment.

Despite the fact that the ideas of the functionalists are not always supported by facts from real life, they can still be accepted. Then it follows from the foregoing that in economic theory inequality is studied in terms of social status, one of which is the wage received by the individual. Sociologists, on the other hand, are trying to understand the real causes of inequality in the possession of basic goods, which are more difficult to quantify and, therefore, evaluate. It seems to us that this is why in sociology the issue of income inequality and its assessment has so far been less explored.

Apparently, one of the reasons that gave rise to such populist policies was the significant income inequality in the countries of Latin America. At one extreme were the very wealthy, who accounted for most of the national income, and, using their economic power, they exerted political pressure on the government to avoid large amounts of taxation. At the other extreme were the lower classes, who disposed of only a small part of the national income, but whose huge share in the total population demanded substantial public spending. This ratio generates the need for increased spending when the government's ability to increase tax revenues is low. This has not been and is not the case in East Asia, where income distribution is significantly more even.

Inequality is important not only in itself, but also because it is one of the causes of a much more obvious and acute problem facing all governments - the problem of poverty. Poverty does not have any unambiguous indicator. There is an absolute approach (setting a living wage or a poverty line), a relative approach (setting a poverty line at 50% of the median or average income) and a subjective approach. None of them is unconditional, but what is significant in all dimensions is the dynamics, composition and social mobility of the poor. The most common indicator is the poverty rate - the proportion of the population living below the poverty line, i.e. having income

This inequality is being overcome gradually. In modern conditions, this is primarily due to the acceleration of scientific and technological progress, which leads to an increase in the general educational and cultural and technical level of members of society, leads to a decrease in differences in the qualifications of different categories of workers, and, consequently, in their income levels. Smoothing out the difference in income and consumption, generated by the unequal family status of the worker, is facilitated by an increase in the funds allocated by the state for the maintenance of those members of society who, due to their age or other reasons, cannot take part in social production.

But why does income inequality exist at all After all, in democratic countries it is customary to talk about equality of opportunity, which should be provided by the relevant institutions of a market economy. Various economists name many reasons and factors for this inequality. Let us note only the most important of them.

Fifthly, there is a group of reasons that are simply related to luck, chance, unexpected gain, etc. Under the conditions of uncertainty characteristic of a market economy, this group of reasons can explain many cases of inequality in income distribution.

As we already know, people receive income as a result of providing the factors of production that they own (their labor, capital, land) for the use of firms to produce goods that people need, or they invest these resources in creating their own firms. In such a mechanism of income formation, the possibility of their inequality was initially laid down. As seen in fig. 13-1, the reason for this

The reason for this rapid increase in income inequality is helped by Fig. 13-6.

Suppose now that the utility received by an individual depends not only on his income, but also on how income is distributed in the community. Individual B is concerned about inequality in society, and for this reason, in the process of redistribution, with an increase in his income, his own utility increases, while the utility of individual A decreases, only up to a certain point (point M). With a further increase in inequality, its utility decreases (Fig. 5). Similarly, the utility of individual A decreases as the utility received by individual B falls below the level corresponding to the point N. We thus assumed the existence of external effects in consumption (for more details on external effects, see the lecture).

This argument has been criticized for two reasons. First, there are other categories of expenditure (such as food) that are, at least on some level, just as necessary. But the difference in the amount of food needed is likely to be smaller than the difference between the required amounts of medical expenses. Secondly, a significant part of medical expenses is provided at the discretion of the patient (for example, a separate room or not, a TV in the room, plastic surgery for rejuvenation, etc.). The law, however, does not distinguish between "necessary" expenses and "optional" expenses, since such a distinction, although clear in principle, is practically impossible in practice. Tax rules currently only allow medical expenses to be deducted where they exceed 7.5% of adjusted gross income. This seems to reflect the view that significant disparity in ability to pay arises only in connection with significant medical costs, and that these, in all probability (but not always), should not be "optional".

Such a regime has the consequence of both inefficiency and inequality. The inefficiencies are obvious and investments are being diverted to less productive but more tax-friendly uses. Inequality is often more subtle. There are two reasons for this. First, resources are diverted to favorable areas where after-tax returns may be declining. Individuals in such industries earn the same after-tax income in the long run as those in other industries. Those operating in such an industry during the special tax regime receive some additional income during the transition period.

Income inequality and poverty are contradictory phenomena, since their sources have a large number of different causes, and the significance of each of them is difficult to assess. For example, few question the existence of discrimination, but its role as a source of poverty and inequality remains uncertain. However, in disputes on topics that have already become traditional, assessments are used more often than facts, and this area is no exception. Everyone agrees that hard-working bright personalities are worthy of reward, but the question is how much And if hard work should be rewarded, what should be the punishment for lazy people Whether parents should be allowed to make a fortune for their children or inherit it is an example of dishonest receipt advantages in life Different people with their views and assessments will give different answers to these questions.

In ch. 19 we discussed some of the causes of rising income inequality. Increased trade with low-wage underdeveloped countries and changes in technology have reduced the demand for unskilled labor and increased the demand for skilled workers in the US itself. As a result, the wages of unskilled workers, compared with those of highly skilled workers, have fallen, resulting in changes in relative incomes and increased family inequality.

The theoretical discussion was considered in the previous chapter according to the functionalist point of view, in modern societies there is equal access to education, and the educational system acts as the most important channel of social mobility. This hypothesis was challenged by Jencks and Boudon, who argued that the causes of inequality lie outside of education, are determined mainly by economic factors (income inequality), and education is not able to smooth out existing disparities. According to Bourdieu, equality of opportunity is nothing more than a myth, since the educational system reproduces the existing pattern of distribution of cultural capital among classes in such a way that the culture that the educational system transmits is closest to that of the ruling class. The most striking manifestation of this process is the examination system.

It has also become clear that ensuring human security will require the development of new policies, both nationally and globally. In this regard, it is important to create an early warning approach not only to serious domestic crises, but also to economic crime. Its objective reasons lie in inefficient consumption, high unemployment and impoverishment, in the reduction of real wages and the absence of sources of permanent income, in the violation of human rights and ethnic conflicts, in the increase in inequality between regions and individual social strata. It should also not be forgotten that "the state creates criminals faster than it punishes them. We first issue a lot of laws that give rise to crimes, and then we issue even more laws in order to punish these crimes," Tooker rightly points out.1

Federal Agency for Education GOU VPO

All-Russian Correspondence Institute of Finance and Economics

Department of Economic Theory

COURSE WORK ON THE TOPIC

Income distribution and inequality

Lecturer Associate Professor

Dzhambulova Shamshiya Zhangazinovna

Work completed

Anisimova Tatyana Vitoldovna

Faculty of Management and Marketing

No. 08MMD13598, No. GROUP 1

Omsk 2009

Introduction

2. Income inequality: its causes and indicators. Lorenz Curve and Gini Coefficient

3. The problem of a fair distribution of income in Russia and ways to solve it

Workshop

Conclusion

Bibliography

Introduction

Evaluation of indicators of the dynamics and structure of incomes of the population is the most important element in the development of comprehensive forecasts. Incomes and the purchasing power of the population are not only of social importance as components of the standard of living, but also as factors determining the length of life itself. They are very significant as an element of economic recovery, which determines the capacity of the domestic market. A capacious domestic market, secured by solvent demand, is a powerful incentive to support domestic producers.

The low level of income and, as a result, the low purchasing power of the bulk of the population is one of the main reasons for the stagnation of the Russian economy.

Obviously, in order to revive the economy, it is necessary to form effective demand through an increase in the part of the population's income in the total amount of society's income - GDP. Basically, in order to revive the domestic market and support domestic producers, it is strategically important to increase the incomes of the poorest and middle part of the population. Increasing and, of course, timely payment of salaries, pensions, scholarships and other social benefits is essential for economic recovery. This is what justifies the relevance of the consideration of this topic.

Relevance allows you to determine the topic of research - the distribution of income

Based on the topic, it is possible to designate the purpose of the study - the distribution of income and the problem of justice in a market economy.

To achieve this goal, it is necessary to solve the following tasks:

Theoretical aspects of income generation and their regulation;

Explore the main directions of state income policy;

Uneven distribution of income;

Distribution of income in Russia and features of uneven distribution in the Russian Federation.

The theoretical and methodological basis of the work was the published scientific works of domestic and foreign economists on the formation and distribution of incomes of citizens, as well as the main methods of their state regulation. When solving the tasks set, such methods were used as: observation, generalization, comparison, induction, deduction.

The subject of the study is the fairness of income distribution.

The object of research is the market economy.

1. The essence of income, sources of their formation and forms

Income - regular replenishment of the budget of an economic entity measured by money.

Income is the result of the production and economic activities of an economic entity, obtained as the difference between the cost of products, goods and services sold and the costs incurred.

The income of participants in a market economy is distributed among the factors of production (land, labor, capital, entrepreneurial skills, knowledge). The market system entails significant inequality in the distribution of income between different segments of the population. In order to mitigate this inequality, the state pursues a social policy, the main content of which is the redistribution of income between certain categories of the population.

Under the income of the population is understood the amount of money and material goods received or produced by households for a certain period of time. The role of income is determined by the fact that the level of consumption of the population directly depends on the level of income.

Monetary income of the population - includes all receipts of money in the form of remuneration of employees, income from entrepreneurial activities, pensions, scholarships, various benefits, income from property in the form of interest, dividends, rent (on deposits, securities, real estate) from the sale of agricultural products economy and various products, income from various services rendered to the side, as well as insurance indemnities, loans, income from the sale of foreign currency, etc.

Income in kind - includes primarily products produced by households for their own consumption.

Aggregate income - represents the total amount of cash and in-kind income from all sources of income, taking into account the cost of free or preferential services provided at the expense of social funds.

Nominal income - characterize the level of cash income, regardless of taxation and price changes.

Disposable income is nominal income minus taxes and other obligatory payments, i.e. funds used by the population for consumption and savings. To measure the dynamics of disposable income, the indicator “real disposable income” is used, calculated taking into account the price index.

Real income - characterize nominal income, taking into account changes in retail prices (and tariffs).

Real disposable cash income is determined based on the cash income of the current period minus mandatory payments and contributions adjusted for the consumer price index.

Wages are the price of labor services provided by employees of various professions in the implementation of their business activities.

Nominal wage is the amount of money received by an employee for a certain period of time (week, month, etc.).

Real wages are nominal wages, taking into account the movement of retail prices (and tariffs). Thus, a 15% increase in nominal wages and a 10% increase in the retail price level results in a 5% increase in real wages. Nominal wages can rise and real wages fall if prices of goods and services rise faster than nominal wages.

The functional distribution of income occurs among the owners of the factors of production. However, in real life, many of the factor incomes are intertwined (for example, the participation of employees in the profits of the enterprise) and redistributed (as is the case with social transfers).

The main components of the monetary income of the population are wages, income from entrepreneurial activity and property, as well as social transfers (pensions, scholarships, etc.).

Most often, the following four basic principles of distribution are distinguished:

Equal distribution. It takes place when all members of society (or a certain part of it) receive equal income or benefits. This principle is typical for primitive societies, as well as for countries with a regime that Marx and Engels defined as "barracks communism." In the literature, you can also find another, bookish name for this principle - egalitarian distribution. Since people differ in their abilities and energy, the equalization of the remuneration of their labor inevitably gives rise to a situation where "one plants a vineyard, and the other eats its fruits."

Market distribution assumes that each of the owners of one or another factor of production (labor, entrepreneurial abilities, land, capital) receives a different income - in accordance with the economic utility and productivity of his factor. So, in relation to the owners of the labor force (that is, hired workers), the well-known principle of distribution according to work operates. It means that the amount of income of each worker depends on the specific market assessment of the significance of this type of labor, as well as on its final results (how much, what, how and what quality is produced).

Distribution by accumulated property. It manifests itself in the receipt of additional income by those who accumulate and inherit any property (land, enterprises, houses, securities and other property).

Privileged distribution is especially typical for countries with undeveloped democracy and civilly passive society. There, the rulers arbitrarily redistribute public goods in their favor, arranging for themselves increased salaries and pensions, improved living conditions, work, treatment, recreation and other benefits. Montaigne is right: “It is not want, but rather abundance that gives rise to greed in us.”

2. Income inequality: its causes and indicators. Lorenz Curve and Gine Coefficient

Voltaire also reminded us that we no longer live in that “golden age when people were born with equal rights and received the same share of the juicy fruits of the uncultivated land.” Indeed, in a developed market, the existence of inequality is objectively determined by the fact that the market system is an impassive and rigid mechanism that does not know charity and rewards people only according to the final efficiency of their activities. People differ greatly among themselves: in hard work, activity, abilities, education, ownership of property, and the ability to spend income productively. This means that they cannot work, earn and live the same way.

And it is absolutely normal that the market, through its system of differentiated remuneration, objectively reveals the different capabilities of people, determining "who should be a doctor or a lawyer, who should collect garbage and sweep the streets." The most absurd and harmful thing for mankind, says Ford, is to assert that all people are equal. They are very different, and the one who “creates a lot” must also “bring a lot into his house”, and vice versa. This is precisely what constitutes "strict social justice, arising only from human labor." There is no place for charity in wages. Everyone gets exactly what they deserve.

Why does income inequality exist at all? In democratic countries, it is customary to talk about equality of opportunity, which should be provided by the relevant institutions of a market economy. Various economists name many reasons and factors for this inequality. Let us note only the most important of them.

First, from birth, people are endowed with various abilities, both mental and physical. Other things being equal (this premise must be kept in mind), a person endowed with exceptional physical strength is more likely to become a famous and highly paid athlete.

Secondly, differences in ownership of property, especially inherited property. People cannot choose in which family they will be born - hereditary millionaires or ordinary workers. Consequently, one of the varieties of income, i.e. income from property will vary significantly among the subjects we have named.

Thirdly, differences in educational level. This reason itself largely depends on the first two named. A child born in a rich family is more likely to receive an excellent education and, accordingly, a profession that brings a high income than a child in a poor and large family.

Fourth, even with equal opportunities and the same starting levels of education, people who are sometimes called "workaholics" will receive more income. These people are ready to take work home, stay on duty at the workplace to resolve a particular professional problem, ignore their poor health, just to achieve high results in their work.

Fifthly, there is a group of reasons that are simply related to luck, chance, unexpected gain, etc. In the conditions of uncertainty characteristic of a market economy, this group causes many cases of inequality in the distribution of income.

Thus, at least for the reasons mentioned, equality of economic opportunities is not always observed. The poor and the rich still exist even in the most prosperous highly developed countries.

Differences in income per capita or per employed person are called income differentiation. Income inequality is characteristic of all economic systems. The largest income gap was observed in the traditional system. This gap was greater than in the era of free competition capitalism. Then, with the transition to a modern market economy, differences in income (and wealth) levels noticeably decrease. In the transition from the administrative-command to the market system, the growth of income differentiation is due to the fact that part of the population continues to live in the conditions of the decaying old system and at the same time a social stratum arises that operates according to the laws of the market economy. As more and more sections of the population are involved in market relations, the size of inequality is reduced.

Various indicators are used to quantify income differentiation. The degree of income inequality is reflected by the Lorenz curve (Fig. 1), in the construction of which the shares of families (in % of their total number) with the corresponding percentage of income were plotted along the abscissa axis, and the income shares of the families under consideration (in % of total income) were plotted along the ordinate axis .

Share of income, %

absolutely equal distribution line

actual line

distribution

0 share of families, %

Figure 1 - Lorenz curve.

The theoretical possibility of a perfectly equal distribution of income is represented by the bisector, which indicates that any given percentage of families receive a corresponding percentage of income. This means that if 20.40.60% of families receive 20.40.60% of the total income, respectively, then the corresponding points will be located on the bisector. The Lorenz curve is a cumulative distribution of the population and the corresponding incomes. As a result, it shows the ratio of the percentage of all income and the percentage of all their recipients. If incomes were distributed evenly, i.e. 10% of the recipients would have a tenth of the income, 50% - half, etc., then such a distribution would look like a line of uniform distribution. The uneven distribution is characterized by the Lorentz curve, i.e. the line of actual distribution, the further away from the straight line, the greater the differentiation. For example, the bottom 20% of the population received 5% of the total income, the bottom 40% received 15%, and so on. the shaded area between the absolutely equal distribution line and the Lorenz curve indicates the degree of income inequality: the larger this area, the greater the degree of income inequality. If the actual distribution of income were absolutely equal, then the Lorenz curve and the bisector would coincide. The Lorenz curve can be used to compare the distribution of income over different time periods or between different populations.

One of the most commonly used indicators of income differentiation is the quintile (decile) coefficient, which expresses the ratio between the average income of 20% (10%) of the highest paid citizens and the average income of 20% (10%) of the poorest.

To characterize the distribution of total income between population groups, the population income concentration index (Gini coefficient) is used. The larger this coefficient, the stronger the inequality, i.e. the higher the degree of polarization of society in terms of income, the closer the Gini coefficient is to 1. when incomes are equalized in society, this indicator tends to zero.

The Gini coefficient is calculated by the formula:

K L \u003d 1- ,

where S - increasing percentage of cash income;

(F I - F (I - L)) - the proportion of the population belonging to the I - interval;

S (I - L) , S I - the share of the total income attributable to the beginning and end of the I-th interval.

Economic growth in Russia does not help to fight poverty and does not contribute to reducing the gap between the incomes of the poor and the rich. This conclusion was made in the report of the Institute of Socio-Economic Problems of the Population of the Russian Academy of Sciences, dedicated to the problem of poverty in Russia.

Scientists note that the difference between the incomes of the richest and the poorest is almost the same in all regions of Russia, despite the fact that these regions themselves face various social problems and the economic situation in them is different.

At the same time, scientists pay special attention to the fact that the “gap” between the poor and the rich, as reforms are carried out, does not decrease, but increases: if in 1991, according to the State Statistics Committee, it reached 4.5 times, then by now, according to expert estimates, increased up to 14-15 times.

The incomes of the population vary enormously, "and these variations are weakly related to the level of gross regional product (GRP) per capita," the report says.

“About 30% of the population receive wages below the subsistence level,” said Alexei Shevyakov, director of the Institute for Socio-Economic Problems of Population of the Russian Academy of Sciences.

Economic growth in the country has a positive effect mainly on the incomes of the prosperous part of the population. And, contrary to the government's expectations, it does not lead to a real reduction in the number of poor and low-income citizens.

A paradoxical situation is emerging: neither the rate of poverty reduction nor the rate of growth in living standards are in any way statistically related to the rate of growth of the gross regional product (GRP).

And, unlike countries with developed economies, in Russia the growth of the payroll fund is also not evidence of an improvement in the socio-economic situation: after all, most of this growth is due to an increase in the salaries of top and middle managers, while the indexation of salaries of state employees is the poorest part of the Russian population - often lags behind the rate of price growth. 45% of the total increase in wages was due to the increase in wages of the top 10% of workers, and more than 60% - the increase in wages of the top 20% of workers. The contribution of the wage growth of the 20% of workers with the lowest wages to the total wage growth was less than 3%.

According to the leading expert of the Development Center Natalya Akindinova, in 2009 there was a serious gap between the incomes of the wealthy and the poor. The state periodically reduces the gap between the incomes of the poor and the rich by increasing social payments and salaries to state employees.

“We have a high level of income polarization due to an undifferentiated economy. Incomes are concentrated in a limited range of industries, respectively, the growth of incomes in other industries is not going well,” said Natalia Akindinova.

Employees of the Institute of Socio-Economic Problems of Population of the Russian Academy of Sciences believe that polarization is most noticeable in the growth of income from property.

“According to our estimates, in 2012 property income accounted for 28.5% of all cash income of the top 20% of the population and about 12% of GDP. The problem of unfair income inequality in the Russian regions lies in the fact that the regional elites provide themselves with incomes many times greater than both GRP per capita and the average per capita income of the population of the region. Moreover, the lower the level of productivity of the regional economy and, accordingly, the lower the standard of living of the population of the region on average, the stronger such contrasts,” the report says.

Different results of economic activity, differences in the level of wages, in the return on human capital for men and women lay the economic foundations of modern gender inequality. But besides this, other social and demographic factors also influence gender inequality. Low wages for women are often not seen as a serious problem, as it is assumed that most women have access to other sources of resources through spouses, other members of their families, and thus can work for low wages without falling into the ranks of the poor. Economic inequality in income can, of course, be smoothed out due to intra-family redistribution, or it can even increase. There may also be sources of income other than wages, inequalities in access to which will influence gender inequality.

The gender structure of the Russian population differs most strongly in older ages. High mortality and low life expectancy for men have led to the fact that there are almost 2.2 times more women older than working age than men older than working age. Or, if we compare comparable age groups over 60, there are almost 1.9 times more women than men. Thus, two-thirds of pensioners are women. Moreover, in the oldest age groups, over 75 years old, this dominance is even stronger - 3-4 times.

Poverty of single older pensioners is also characterized by extreme forms of its manifestation, since, having no other transfers except pensions, having lost the physical ability to earn money and maintain a personal subsidiary plot, they find themselves among the most needy groups of the population.

Incomplete families have fewer economic opportunities, taking into account the dependent burden. And although the number of children in a family is on average greater in complete families, compared with single-parent families, which are overwhelmingly one-child, but taking into account the fact that in half of complete families there is one child for two parents, the dependency load in single-parent families is more conducive to getting to poor populations.

A high divorce rate, an increase in the number of illegitimate children, an increase in widowhood due to high male mortality, a decrease in remarriages - all these factors increase the proportion of single-parent families.

The analysis of poverty aspects is usually carried out on the basis of data from the State Statistics Committee or research databases such as RLMS. But specialists are well aware that such studies do not affect the extreme groups: the richest and the poorest. Without taking into account the poorest, the marginalized, the social bottom, the picture is displaced, which does not allow developing an adequate social policy.

Most of the homeless have secondary education, and there is a decrease in the proportion of homeless people with incomplete secondary education. This is due to the fact that in the 1990s the replenishment of the homeless occurred largely not only at the expense of former prisoners, but also at the expense of those who lost their homes as a result of real estate transactions. According to the professional and qualification composition, these are mainly workers (80%).

Sources of livelihood for the homeless: - 59% have casual and temporary earnings; - live on the money of friends and relatives 20%; - asking for alms 14%; - receive pensions and/or benefits 11%; - collect bottles 7%; Only 4% have a permanent job. The most difficult situation is for people aged 50 and older: 11% had no income, 31% were forced to beg.

The low share of those who have permanent jobs is explained by the fact that enterprises (in institutions, organizations) practically do not hire people who do not have registration at the place of residence, and those who have lost their housing and registration at the place of residence are fired.

Street children also belong to the marginalized segments of the population. They are not always homeless, but due to various circumstances, their lifestyle is mainly connected with the street.