One important result is that big and/or progressive tax and transfer systems, anti-discrimination and educational initiatives, and well-designed labour market institutions can all help to lessen income inequality.
The unequal distribution of income among a population is known as income inequality. Income disparity is higher the less evenly distributed the income is. Wealth inequality, or the unequal distribution of wealth, frequently coexists with income inequality.
Strengthening collective bargaining rights, full employment plans, living wage policies, tougher minimum wage laws, and wage subsidies are just a few of the employment-related policies available.
Through the tax and welfare systems, governments can take action to encourage equity, combat poverty, and reduce inequality. This entails implementing a progressive tax and benefit system that redistributes social benefits to people with lower earnings while collecting proportionately more tax from higher income earners.
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