MGMT1021 Lecture 2: Day 2
3/29: Income Inequality
The phenomenon:
A measure of inequality: the Gini coefficient
- Measures the extent to which the distribution of income deviates from a perfectly equal
distribution.
- The % of area that lies between the lorenz curve and a line of perfectly equal
- Varies between 0 ( perfect) and 1 (imperfect)
- Positive correlation between inequality and health and social problems
- Prevalence of mental illness is higher in more unequal rich countries: more
unequal country, more mental illness
- Drug use more common in more unequal countries. Positive correlation
- Life expectancy is longer in more equal rich countries.
- Rates of imprisonment are higher in more unequal countries
Inequality around Organizations:
qL what causes income inequality most directly
A: hw organization hire, evaluate, pay promote and fire employees
The paradox of inequality and corporate size
Employment concentration = no. of workers employed by n largest firms / total labor force
Correlation between income inequality and employment concentration is -0.89
Inequality in Organizations:
Why study low wage work?
- Economically ( and politically) consequential
- Rapidly Growing
Taking the definition of low wage work” = 12 hr or less
workers between 18-64 working low wage jobs
2001= 23.8%
2011=31.2%
The impact of low wage work on employees:
Health And Well Being
- Health outcomes (high blood pressure etc. ( linked to jobs
- Lack of medical care
Decision Making
- The scarcity trap
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Document Summary
Measures the extent to which the distribution of income deviates from a perfectly equal distribution. The % of area that lies between the lorenz curve and a line of perfectly equal. Varies between 0 ( perfect) and 1 (imperfect) Positive correlation between inequality and health and social problems. Prevalence of mental illness is higher in more unequal rich countries: more unequal country, more mental illness. Drug use more common in more unequal countries. Life expectancy is longer in more equal rich countries. Rates of imprisonment are higher in more unequal countries. Inequality around organizations: ql what causes income inequality most directly. A: hw organization hire, evaluate, pay promote and fire employees. Employment concentration = no. of workers employed by n largest firms / total labor force. Correlation between income inequality and employment concentration is -0. 89. Taking the definition of low wage work = 12 hr or less workers between 18-64 working low wage jobs.