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638235: url: /topic/distribution-of-wealth-and-income, shareUrl: title: Distribution of wealth and income, documentGroup: TOPIC PAGINATED MEDIUM ,gaExtraDimensions: 3:false

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Distribution of wealth and income, the way in which the wealth and income of a nation are divided among its population, or the way in which the wealth and income of the world are divided among nations. Such patterns of distribution are discerned and studied by various statistical means, all of which are based on data of varying degrees of reliability.

Wealth is an accumulated store of possessions and financial claims. It may be given amonetaryvalue if prices can be determined for each of the possessions; this process can be difficult when the possessions are such that they are not likely to be offered for sale.Incomeis a net total of the flow of payments received in a given time period. Some countries collect statistics on wealth from legally required evaluations of the estates of deceased persons, which may or may not be indicative of what is possessed by the living. In many countries, annualtaxstatements that measure income provide more or less reliable information. Differences in definitions of incomewhether, for example, income should include payments that are transfers rather than the result of productive activity, orcapitalgains or losses that change the value of an individuals wealthmake comparisons difficult.

In order to classify patterns of national wealth and income, a basis of classification must be determined. One classification system categorizes wealth and income on the basis of the ownership of factors of production:labourland, capital, and, occasionally, entrepreneurship, whose respective forms of income are labeled wages,rent, interest, andprofit. Personal distribution statistics, usually developed from tax reports, categorize wealth and income on a per capita basis.

Gross national income(GNI) per capita provides a rough measure of annual national income per person in different countries. Countries that have a sizable modern industrial sector have a much higher GNI per capita than countries that areless developed. In the early 21st century, for example, theWorld Bankestimated that the per-capita GNI was approximately $10,000 and above for the most-developed countries but was less than $825 for the least-developed countries. Income also varies greatly within countries. In a high-income country such as theUnited States, there is considerable variation among industries, regions, rural and urban areas, females and males, and ethnic groups. While the bulk of the U.S. population has a middle income that is derived largely from earnings, wages vary considerably depending on occupation. (See alsogross national productgross domestic product.)

A significant proportion of an economys higher incomes will derive frominvestmentrather than earnings. It is often the case that the higher the income, the higher the investment-derived portion tends to be. Because most fortunes require long periods to accumulate, the existence of a class of very wealthy persons can result from the ability of those persons to retain their fortunes and pass them on to descendants. Earned incomes are influenced by a different kind ofinheritance. Access to well-paid jobs andsocial statusis largely the product of education and opportunity. Typically, therefore, well-educated children of wealthier parents tend to retain their parents status and earning power. Adynamiceconomy, however, increases the likelihood of attaining wealth and status through individual effort alone.

First, how is the national income distributed among persons? How many persons earn less than $10,000, how many between $10,000 and $20,000, how many between $20,000 and $30,000, and so on? Are there regularities in these statistics? Is it possible to generalize about them? This is the problem of personal

The development of market economies contributed to the spread of democracy in other ways as well. As the economic well-being of large segments of the worlds population gradually improved, so too did the likelihood that newly established democratic institutions would survive and flourish.

14 percent of the nations income. The rest of his calculations can be summarized as follows:

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