Current Trends of Income Inequality and Poverty

Abstract

Income inequality has grown over the past few decades, both between countries and within countries. Moreover, new manifestations and new indicators of inequality have emerged. In particular, The Great Gatsby Curve describes the inverse relationship between income inequality and intergenerational flexibility. Currently, climate change and technological transformations are among the major factors of income inequality and poverty trends.

The article analyzes the current trends of income inequality and poverty in the world, the dynamics of income inequality in Armenia. The factors influencing the poverty level and income inequality in Armenia were assessed through an empirical (econometric) study. The results of the regression analysis show that the increase in GDP and remittances from abroad contributes to the reduction of poverty and income inequality. According to the Logit model, the increase in the level of education of the head of the household, the increase in remittances from abroad, the increase in the average monthly expenditure of the household contribute to overcoming the poverty status of the household. The likelihood of being poor increases if a family leaves the benefit system for poor families, moves from urban to rural areas or one more family member is added.