Context:
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Income inequality remains one of the most pressing socio-economic challenges globally, shaping access to opportunities, social mobility, and inclusive development.
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A recent study published in Nature Sustainability provides long-term insights into inequality trends over the last three decades, highlighting that inequality impacts a significant share of the world’s population.
Key Highlights:
Scale of Inequality in 2023
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In 2023, nearly 50% of the population lived in conditions affected by income inequality.
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This indicates that half the world continues to experience unequal income distribution despite economic growth.
Regional Variation in Inequality Trends
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The study shows a mixed global picture:
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About one-third of people lived in regions where inequality declined.
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Around one-fourth lived in regions where both income and inequality sharply increased since 1990.
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Long-Term Inequality Dynamics (1990–2023)
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The analysis covered three decades of income inequality data.
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It reveals that inequality trends are not uniform, but shaped by regional economic structures and policy choices.
Drivers of Rising Income Inequality
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Key contributing factors include:
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Globalization (unequal gains from trade and capital flows)
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Technological change (automation and skill-biased growth)
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Policy decisions affecting taxation, welfare, and labour protections
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Significance / Concerns
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Persistent inequality can lead to:
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Social unrest
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Reduced human development outcomes
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Weakening of social cohesion
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Barriers to achieving SDGs and inclusive growth
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Relevant Prelims Points:
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In 2023, 50% of the population faced income inequality impacts.
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One-third lived in areas with declining inequality.
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One-fourth experienced sharp increases in income and inequality since 1990.
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Income inequality reflects unequal income distribution across society.
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Progressive taxation is one key policy tool for reducing inequality.
Benefits + Challenges + Impact
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Benefit of addressing inequality: stronger inclusive growth and stability.
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Challenges: structural economic divides, unequal access to education and jobs.
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Impact: Inequality shapes long-term development, governance legitimacy, and social justice.
Relevant Mains Points:
Economy and Society Linkages
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Inequality affects consumption patterns, poverty reduction, and intergenerational mobility.
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High inequality can coexist with growth but undermines inclusiveness.
Policy Dimensions
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Effective interventions require:
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Progressive taxation and redistributive policies
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Investment in universal education and healthcare
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Strengthening labour market protections
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Social security expansion
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Targeted Governance Approach
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Since inequality trends vary regionally, policies must be tailored rather than uniform.
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Focus should be on vulnerable regions experiencing sharp inequality rise.
Way Forward
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Adopt comprehensive strategies combining:
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Inclusive economic reforms
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Strong welfare systems
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Skill development for technology-driven economies
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Balanced globalization with social protection
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Monitor inequality indicators as part of sustainable development planning.
UPSC Relevance (GS-wise):
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GS 3 (Economy): Inclusive growth, redistribution, taxation policies
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GS 1 (Indian Society): Social inequality, development disparities, mobility challenges
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Essay Topics: Poverty vs inequality, growth with justice, welfare state role