The four variables (x, k, L1, and L2) are the drivers of national inequality in
the framework followed in this chapter. Policy makers may be able to influence
these drivers through various instruments. For example, support for small farmers
can moderate rural inequality, while progressive income taxation could moderate
urban inequality. General support for rural development can help to reduce the
urban–rural income ratio, while policies that restrict or hamper migration could
reduce the share of the urban population to a lower level than it otherwise would
have been.
The four variables (x, k, L1, and L2) are the drivers of national inequality inthe framework followed in this chapter. Policy makers may be able to influencethese drivers through various instruments. For example, support for small farmerscan moderate rural inequality, while progressive income taxation could moderateurban inequality. General support for rural development can help to reduce theurban–rural income ratio, while policies that restrict or hamper migration couldreduce the share of the urban population to a lower level than it otherwise wouldhave been.
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