Income inequality is one the biggest challenge faced by different countries around the globe, such as China, India and the U.S. In the U.S, income inequality has been on the rise, especially among the highly educated and lowly educated membe...Read More
~Posted on
Aug 2017
Income inequality is one the biggest challenge
faced by different countries around the globe, such as China, India and the
U.S. In the U.S, income inequality has been on the rise, especially among the
highly educated and lowly educated members of the society. The article ‘The
Upside of Income Equality' by Becker and Murphy indicates that income
inequality is an indication that investment in human capital is getting higher
returns in the labor market than it was the case some decades ago. The article
tries to indicate that income inequality is rising due to higher education
producing higher returns. The article tries to demonstrate how higher returns
for the development of human capital are desirable and beneficial to the
society. “We believe that the rise in returns on
investments in human capital is beneficial and desirable, and policies
designed to deal with inequality must take account of its cause (Becker and
Murphy, 2007).”
One of the arguments made by the authors in
this article is that investing in human capital development is having more
positive returns nowadays than it was the case in the past. The authors support
the argument, by providing statistical data demonstrating an increased income
for those with higher education that it was the case in the 1980s (Becker and
Murphy, 2007). I agree with the authors that higher education is paying more
today. Those with a college education today earn more than those with high
school education, and this is the main reason why income gap is rising in the American
society.
Another argument made by the authors is
that income inequality can be addressed by implementing policies that address
the issue of human capital development returns. I agree with the authors that
while trying to address income inequality, the economic policies employed
should not hurt the returns realized from making an investment in higher
education is key in the development of skills needed to advance economic
development in the society. In conclusion, this article provides some critical
arguments that can guide the policy on addressing income inequality in the
American society in the future.