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What is the gap between poor and rich called?

Income inequality is defined as the difference in how income is distributed among individuals and/or populations. It is also described as the gap between rich and poor, wealth disparity, wealth and income differences, or the wealth gap. ( income inequality, 2015)

oecd.org - Inequality and Poverty - OECD
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There is widespread concern that economic growth has not been fairly shared, and that the economic crisis has only widened the gap between rich and poor. The OECD examines the trends and patterns in inequality and poverty for OECD and emerging countries. Its work analyses the multiple causes linked to growing inequalities, such as globalisation, technological change and changes in redistribution policies. It also assesses the effectiveness of social and labour market policies in tackling poverty and high inequalities.

KEY INFORMATION ON INEQUALITY AND POVERTY

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25 November 2022: launch of the Observatory on Social Mobility and Equal Opportunity > Over the past fifteen years, the OECD has collected a significant body of evidence on the extent and drivers of inequalities, social mobility and equal opportunity, including policy responses on how to tackle these issues. This evidence has shown how reducing inequalities can be highly beneficial for society as a whole. To capitalise on these lessons and address existing information gaps, the OECD is launching an Observatory on Social Mobility and Equal Opportunity. The Observatory will push forward the OECD’s work on these key topics, by collecting new data, discussing new policy options and analysing the role played by the civil society and the private sector. 27 October 2022: IDD (Income Distribution Database) data update, with new 2019 or 2020 data for most countries 1 December 2021 : launch of "Is the German Middle Class Crumbling? Risks and Opportunities" : the review demonstrates that the German middle class is similar in size as in peer countries, but substantially smaller than it was in the mid-1990s. Lower middle‑class households face an increased risk of slipping out of the middle; meanwhile, upward mobility into the middle has declined, particularly for workers in “typical” middle-class occupations. Employment growth forecasts point to further occupational polarisation. The review proposes policy options for strengthening the employability of middle-class workers, creating good-quality, future-oriented jobs, and boosting middle‑class disposable incomes. See "Highlights" for a summary. 18 November 2021 : launch of "Does Inequality Matter? How people perceive economic disparities and social mobility" report:

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How OECD citizens perceive economic disparities and social mobility, including:

Do people care about inequality?

Are perceptions disconnected from reality?

How divided is public opinion within countries?

How do people’s views on inequality shape their demand for redistribution?

6 July 2021: Policy brief and Policy Webinar (Agenda and Replay) on Inequalities in Household Wealth and Financial Insecurity of Households; This brief analyses the most recent levels and trends in the distribution of household wealth and its composition at the top and the bottom of the distribution. It looks at the availability of liquid wealth holdings for poorer households as a buffer to draw in exceptional circumstances such as the current crisis, and discusses policy options to help counteract high and rising wealth inequality + New WDD (Wealth Distribution Database) data update, via http://oe.cd/wdd

April 2019: New report: Under Pressure: The Squeezed Middle Class

This report sheds light on the multiple pressures on the middle class. It analyses the trends of middle-income households through dimensions such as labour occupation, consumption, wealth and debt, as well as perceptions and social attitudes. It also discusses policy initiatives to address the concerns raised by the middle class, by protecting middle-class living standards and financial security in the face of economic challenges. This report provides new evidence on social mobility in the context of increased inequalities of income and opportunities in OECD and selected emerging economies. It covers the aspects of both, social mobility between parents and children and of personal income mobility over the life course, and their drivers. The report shows that there is space for policies to make societies more mobile and protect households from adverse income shocks. It discusses the options and measures that policy-makers can consider how to improve social mobility across and within generations.‌‌ November 2016: OECD Inequality Update 2016 "Income inequality remains high in the face of weak recovery" 6-page report (.pdf) figures and data (.xlsx) The long-run increase in income inequality not only raises social and political concerns, but also economic ones. It tends to drag down GDP growth, due to the rising distance of the lower 40% from the rest of society. Lower income people have been prevented from realising their human capital potential, which is bad for the economy as a whole.This book highlights the key areas where inequalities are created and where new policies are required, including persisting gender gaps; the challenge of high wealth concentration, and the role for redistribution policies, among others.

Data on income inequality and poverty

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OECD Income Distribution Database To benchmark and monitor income inequality and poverty across countries, the OECD relies on a dedicated statistical database: the OECD Income Distribution Database. Due to the increasing importance of income inequality and poverty issues in policy discussion, the database is now annually updated. OECD Income Distribution Database Dynamic figures Income inequality: Income is defined as household disposable income in a particular year. It consists of earnings, self-employment and capital income and public cash transfers; income taxes and social security contributions paid by households are deducted. Income inequality is measured by five indicators, such as the Gini coefficient and S90/S10, among others. Poverty rate: The poverty rate is the ratio of the number of people (in a given age group) whose income falls below the poverty line; taken as half the median household income of the total population.

"Compare Your Income'' web tool

What's your perception of income inequality? The OECD Compare your income tool allows you to see whether your perception is in line with reality. In only a few clicks, you can see where you fit in your country's income distribution. In June 2020, an updated edition was released to explore how people’s perceptions of inequality impact their willingness to support redistribution and to see what areas users would prioritise for public spending.

RELATED DOCUMENTS

See here for a full list of our related publications and other material on income distribution and poverty.

For more information, please contact Inequality.Contact@oecd.org

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‌‌ Follow us on Twitter @OECD_Social

oecd.org - Inequality and Poverty - OECD
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