Development patterns
Simon Kuznets argues that income inequality is at least in part dependant on the stage of development a country is in. Kuznets curve shown below demonstrates what he believed was the relationship between the level of income and inequality. Kuznet argued that countries with low levels of development have a much more equal distribution of income and wealth than more developed countries. He argues that as a country develops, they become more capital rich. As such, the owners gain a higher level of capital earnings, which causes more wage disparity and increases the wage gap. Whilst he later argues that through social welfare programmes these developed countries eventually move back to a low level of wage inequality, testing of this theory has largely disproven it.
