Income Inequality
Definition
Degree of income inequality where ‘0’ means perfect equality and ‘1’ means perfect inequality.
Income inequality refers to the extent to which income is evenly distributed among all members of the population.
Measurement and Limitations
The Gini coefficient, or Gini index, is a measure of inequality that indicates how equally income is distributed for a given population. It measures how much an income distribution deviates from perfect equality. Values of the Gini coefficient can range from 0 to 1. A value of 0 indicates that income is equally divided among the population, with all units receiving exactly the same amount of income. At the opposite extreme, a Gini coefficient of 1 indicates a perfectly unequal distribution, where one unit has all of the income in the economy (see footnote 2 at https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=9810009601).
Statistics Canada calculates the Gini coefficient for household total income, household market income and household after-tax income. The data shown here is for household after-tax income. It indicates the state of income inequality when federal and provincial income taxes are taken into account.
Source
Statistics Canada, Table: 98-10-0096-01, “Income inequality statistics across Canada: Canada, provinces and territories, census divisions and census subdivisions,” Release date: 2022-07-13.
Income Inequality in the Sustainable Development Goals
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10. Reduce inequality within and among countries
The international community has made significant strides towards lifting people out of poverty. The most vulnerable nations – the least developed countries, the landlocked developing countries and the small island developing states – continue to make inroads into poverty reduction. However, inequality still persists and large disparities remain in access to health and education services and other assets.
Additionally, while income inequality between countries may have been reduced, inequality within countries has risen. There is growing consensus that economic growth is not sufficient to reduce poverty if it is not inclusive and if it does not involve the three dimensions of sustainable development – economic, social and environmental.
To reduce inequality, policies should be universal in principle paying attention to the needs of disadvantaged and marginalized populations.