Income inequality is the difference in how income is distributed among the population.
Income is defined as household disposable income in a particular year. It consists of earnings, self-employment and capital income and public cash transfers however, income taxes and social security contributions paid by households are deducted. Inequality is also described as the gap between rich and poor, income inequality, wealth disparity, wealth and income differences, or the wealth gap.
The indicator is calculated via the comparison of cumulative proportions of the population against cumulative proportions of income they receive.
This indicator is measured as a Gini coefficient. It ranges between zero (0) in the case of complete equality - that is, each share of the population gets the same share of income, and one (1) in the case of complete inequality - that is, all income goes to the individual with the highest income.
