The Question
The gap between the rich and the poor is growing in many countries. What problems does this cause and what can be done to reduce inequality?
How to approach this question
Identify 2–3 root causes or problems clearly, then propose specific, realistic solutions for each. Examiners reward solutions that are logically connected to the problems identified.
Growing wealth concentration in many developed and developing nations poses serious risks to social stability, economic dynamism, and democratic governance. Identifying the problems this creates and the policies that can address them requires examining multiple dimensions simultaneously.
Extreme inequality undermines social cohesion in ways that are both measurable and consequential. Research by Wilkinson and Pickett demonstrates that more unequal societies consistently show worse outcomes on measures including physical health, mental illness, educational attainment, and rates of violent crime — regardless of average income levels. When large portions of the population cannot access quality education, healthcare, or housing, intergenerational poverty becomes entrenched, reducing aggregate economic productivity through the waste of untapped human potential. Politically, extreme inequality correlates with declining trust in institutions and rising support for populist movements that threaten the stability of democratic systems.
Effective solutions operate across three levels. At the tax policy level, progressive income tax structures and robust inheritance taxes redistribute wealth while maintaining incentives for productive economic activity. Many economists also advocate closing offshore tax havens that allow wealthy individuals and corporations to shelter income from national systems. At the labour market level, legislating a genuine living wage — as opposed to a minimum wage calibrated to poverty rather than dignity — ensures that economic growth translates into improved living standards for lower-income workers. Finally, public investment in quality universal education and healthcare creates the conditions for genuine social mobility by ensuring that life outcomes are shaped by effort and talent rather than inherited privilege.
267+ words · Targets Band 7.5
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EducationIn some countries, governments fund university education so that everyone who qualifies can attend without paying tuition fees. Do the advantages of this policy outweigh the disadvantages?