Trade And Income Inequality Essay

933 words - 4 pages

As trade takes place, living conditions and economic growth must be the ultimate goal. Trade and economic growth that does not establish a reduction in poverty can generate problems that did not exist before. If rapid growth is accomplished at the expense of misdistribution of resources, then it will create social tensions or class warfare. Rapid growth has been shown in different countries that raises gap of income inequality and raise the poverty rate. In India, the slow economic growth has been steady for a period of time until 1991 when the trade and investment liberalization and economic reforms signed. It was a major breakthrough that resulted in rapid economic growth in India.
The ...view middle of the document...

The table below illustrate using Gini Coefficient and Coefficient of Variation from the period of 1987 to 2004, the effect of economic reforms and trade in rural and urban areas of Indian. Looking at the table we found that from the mid 1990s to the beginning of 2000s was the peak of income inequality among rural and urban areas. Consequently, the reforms have attributed to rise in inequality through the years.
As stated, in the 1990s, India faced a sharp increase in inequality. In 2002-2003, of the richest state, Punjab was almost 4.7 richer than Biha, the poorest state. The gap between the richest and poorest states has increased during and after the economic reforms (Pal and Ghosh, 2007). However, a study conducted by Nanda and Kaur (2008) using time-series econometrics analysis showed that there was a statistically insignificant relationship between openness in export industry and inequality wages in inter-industry (Kucera and Roncolato, 2011). One of the major reasons for income inequality during the 1990s were the gradual growth in exports of high technology skill-intensive goods which the change in the skill formation of Indian manufacturing export industry provides the answer for the rise in income inequality.
Free trade increases the growth of output, which creates opportunities for low incomes to move upward in the income scale. Thus, trade should not be blamed for income inequality but unequal opportunities for the poor groups to access technical education and high skilled training can result in adverse income inequality within India. Removing obstacles and policy constraints in order to strength some of the export goods that required labor-intensive skills, which have been affected after opening up trade (Topalova, 2007). However, trade liberalization’s effects vary across India depending on the state. Disparities among Indian states draw an attention to different reasons such as good governance,...

Find Another Essay On Trade and Income inequality

Women’s Income Inequality and The American Dream

2350 words - 9 pages Income inequality is a big ongoing problem in the United States. It has a big effect on what America was all about, the American dream. The American dream that everyone is equal and has equal opportunities. Although a big part of what goes on in the Untied States that just doesn’t fit the American dream; women are unequal in the work place. They are put under what is known as the “Glass Ceiling”. Women do not get promoted in the work

Tackling the Income Inequality and Promote Opportunity in the US

1859 words - 8 pages Introduction President Obama speech in December 2013 hosted by the Center of American Progress spoke about the high disparities of income in the US, saying that his government priorities is to lowering the income inequality and promotes opportunities, especially to the poorest (The White House 2013). Income inequality in the United States (US) is the fourth highest among the Organization for Economic Co-operation and Development (OECD) member

Income Inequality in America and its Contributing Factors

2554 words - 11 pages Income inequality is a major asset to the economy in America and the world. Income Inequality is the imbalanced circulation of a household or individual income across the various individuals within an economy. According to the; Family Structure and Income Inequality in Families with Children article indicated that between years 1976 and 2000, family structure shifts was a key factor with the increase in inequality in America. (Martin, M. A

A Look at Income and Educational Inequality in America

2917 words - 12 pages Rich vs. Poor:A Look at Income and Educational Inequality in AmericaEver since I can remember the importance of education has been made clear. My parents have always told me that I need to get good grades and go to a good college, like them, so I can make money and do the same for my kids and so on. I never stopped to think about how lucky I am that I am actually going to a University with what seems like, such economical ease. The fact of the

The rich and the poor - class-conscious on income inequality

1393 words - 6 pages . This opinion stems from the results of a survey that was conducted early in December of last year. The main idea on this article was to convey a message that there is a rise in people’s perception of class tension between the rich and the poor because of income inequalities. The author’s conclusion is based on a comparison of income inequality to other societal issues such as racial relations, illegal immigration, and young and old

Data Selection and Perliminary Analysis of a Study on Income Inequality

1342 words - 6 pages consumptions such as defence and justice, which benefit the whole society. Individual consumption such as health care, housing and education reflect spending by the government on behalf of an individual household. Hypothesis 6: An increase in government expenditure will lead to a decrease in the level of income inequality. B (Government Expenditure) <0 Trade (% of GDP): The openness of an economy will be measured using trade as a percentage

IMPACT OF POOR GOVERNANCE AND INCOME INEQUALITY ON POVERTY IN PAKISTAN

2341 words - 9 pages There is widespread poverty in Pakistan and the two main reasons are poor governance and income inequality. Few studies have focused on the theoretical substantiation of impact of bad governance and income inequality on poverty, but we do not find any study carrying empirical work on the impact of bad governance on poverty in Pakistan. This study is an empirical research that attempts to find out the long run and short run impact of poor

Impact of Poor Governance and Income Inequality on Poverty in Pakistan

1657 words - 7 pages that those policies that decrease corruption will also be helpful in reducing income inequality as well as poverty. Hoeven (2002) is of the view that decline in income inequality coupled with stellar economic growth is desirable for poverty alleviation. Ali and Tahir (1998) tried to find out if the long run change in poverty was due to economic growth or income distribution. Their results showed that “one percent increase in income while

Analysis of Income Inequality and Policy Representation in the American States by Patrick Flavin

729 words - 3 pages In his article “Income Inequality and Policy Representation in the American States,” Patrick Flavin examined differential policy representation based on citizens’ household incomes. Political Scientists and other scholars have compiled strong empirical evidence over the past 50 years proving that government policies tend to correspond to the aggregated political opinions of the public at both the national and state levels. Flavin hypothesized

Income Inequality: It’s Effect on African-American Single Mothers and Their Children

2035 words - 9 pages Todd Walston Jr Student #: 10058858 Period: 2 1 April 2014 Ms. Providence English 12 Income Inequality: It’s Effect on African-American Single Mothers and Their Children. I believe that it’s not fair for single mothers to get paid less, when some of them are the back bones of this country. Currently the minimum wage, in the United States, is set to 8$ per hour. Women in general are only paid 77%, so it is appropriate to assume that through

Balance Sheet and Income Statement Analysis of Five Publicly Trade Companies

3384 words - 14 pages Balance Sheet and Income Statement PAGE 1 Balance Sheet and Income Statement Analysis of Five Publicly Trade CompaniesUniversity of PhoenixBalance Sheet and Income Statement Analysis of Five Publicly Trade CompaniesThe main objective of financial statements is to provide useful information to external decision makers. The balance sheet together with the income statement and cash flow statement, make up the cornerstone of any company's

Similar Essays

Inequality, Wealth And Income Essay

1222 words - 5 pages The issue of workplace inequality has been in the eyes of the public, and been in awareness of society for decades. Some of the most predominant issues which arise when speaking of workplace inequality include gender, attractiveness, and school prestige. It is proven that these three properties determine or differentiate ones workplace income in comparison to the income of a man, a beautiful woman, or a person who attended an average school. For

Income Inequality And Economic Development Essay

2978 words - 12 pages have grown stupendously, another concerned have emerged among policy makers and economists. Countries, regardless of developing or developed countries are facing greater income inequality. Even countries such as Finland and Denmark which are know to be egalitarian, have seen an increase in income inequality. Sweden, meanwhile, have seen the steepest increase in measure of inequality among 34 OECD countries (OECD, 2011). On the other hand, 4 out of 5

Income And Wealth Inequality In Australia

1209 words - 5 pages Inequality is present in every economy, but to what extent are income and wealth in Australia unequal and what government polices contravene income and wealth inequality? Income is defined as money that an individual or business receives in exchange for providing a good or service or through investing capital, while wealth is a measure of the value of all of the assets of worth owned by a person, community, company or country. Income and wealth

Income Inequality And The Civil Rights Movement

1099 words - 5 pages Introduction The issue of income inequality is a crucial piece of your upcoming re-election campaign this fall. Similarly to the Civil Rights Movement and the War on Poverty in the 1960s, a high level of inequality can hamper social cooperation, encourage intra-elite competition, and ultimately during wartime, as illustrated in the Vietnam War, can further exasperate the American people’s frustrations with income inequality. Social Cooperation