High inequality lowers wealth
Report from Jonas Schytz Juul, Economic Council of the Labour Movement (ECLM) | September 2011
How the level of inequality affects growth and wealth is a subject of frequent discussion. A widespread point of view is that a high level of inequality is an advantage for the growth in society since it promotes incentives to work hard. In contrast there are a number of arguments leading to the conclusion that increased inequality does not lead to higher growth. This study aims at evaluating the correlation between the two, with different data and for different economies, before assessing the roots of such a relationship. Indeed, the study shows a positive relation between equality and wealth and highlights some point of explanations.