Economic inequality refers to the unequal distribution of income (earnings) and wealth (net worth or savings) in a country. It can be measured using a statistic called the Gini coefficient, which varies from zero to one, with 0 representing perfect equality and 1 indicating extreme inequality.

Researchers study economic inequality in order to better understand how it affects different social groups. Economic inequality is often related to other types of inequality, including racial and gender inequality. People also study economic inequality across countries in order to learn more about how global patterns of wealth and poverty change over time.

One perspective on economic inequality holds that one’s level of earning or wealth is partly determined by the opportunities and capabilities they have access to. For example, a person who is born with an extraordinary athletic ability or a genius IQ will probably earn more than someone who was not. This type of inequality is not necessarily bad, but it can be frustrating for those who have no such abilities.

Other perspectives on economic inequality hold that one’s level of earning or wealth reflects their contributions to society. For example, a business owner who hires employees and provides training is likely to earn more than a business owner who simply buys goods and services from suppliers.

Some researchers have found that economically unequal societies tend to have less trust and higher rates of nativist and authoritarian movements. Economic inequality can also reduce the amount of money available for investment in human and physical capital, which can slow economic growth.