distribution of income

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Distribution of Incomeclick for a larger image
Fig. 37 Distribution of Income. The personal distribution of original and final income in the UK, 2002. Final Income = original income less taxes paid, plus state spending on education, health, security benefits. (Source: Social Trends 2004).

distribution of income

the division of a country's GROSS NATIONAL PRODUCT among the multitude of people making up its POPULATION. In most countries, income (wages and salaries, rent, dividends, profit) is unequally divided; this reflects differences in people's natural abilities, educational attainments, special skills, but most importantly differences in the ownership of WEALTH assets such as businesses, houses, stocks and shares, etc. In many countries, however, governments operate progressive TAXATION systems and SOCIAL SECURITY programmes designed to redistribute income and so assist the poorer members of society. Thus, as Fig. 37 shows for the UK in 2002, the poorest 20% of the population received only 3% of total original income, but after taxation and state benefits they received 10% of total final income. See PER CAPITA INCOME.