universal basic income

Equity and Redistribution of Income & Wealth

Equity is about fairness in how income and wealth are shared. Think of a pizza 🍕 – equity asks whether everyone gets a slice that matches their needs and contributions.

Income vs. Wealth

Income is money you earn in a period (salary, wages, dividends). Wealth is the total value of assets (house, savings, stocks) minus debts.

• Income is like the water flowing into a tank.
• Wealth is the amount of water already stored.

Measuring Inequality – The Gini Coefficient

The Gini coefficient (G) ranges from 0 (perfect equality) to 1 (maximum inequality).

$G = \frac{\displaystyle\sum_{i=1}^{n}\sum_{j=1}^{n}|x_i - x_j|}{2n^2 \bar{x}}$

Redistribution Tools

1. Progressive taxes – higher earners pay a higher rate.
2. Social security & welfare payments.
3. Public services (healthcare, education).
4. Universal Basic Income (UBI) – a fixed cash transfer to all citizens.

Universal Basic Income (UBI)

UBI is a regular cash payment given to every adult, regardless of income or employment status. Imagine a monthly allowance that covers basic living costs.

Key Features

• Universal – no means‑testing.
• Regular – usually monthly.
• Unconditional – no work requirement.
• Cash – not in-kind benefits.

Pros & Cons

Real‑World Trials

• Finland (2017‑2018) – 2,000 unemployed received €560/month.
• Kenya (ongoing) – 2,000 households receive $22/month.
• Canada (2020) – temporary UBI during COVID‑19.

Exam Tips for Equity & UBI Questions

Understand key terms: equity, inequality, Gini coefficient, progressive tax, UBI.

Use diagrams: Lorenz curve, bar charts of Gini values.

Structure answers:

1. Define the concept.
2. Explain how it is measured.
3. Discuss real‑world examples.
4. Analyse pros & cons.

Remember to keep your language clear and use examples that show you can apply theory to practice.