The Kuznets Curve

The Kuznets Curve is a concept that illustrates how economic development impacts income inequality over time. Initially, as a country develops and industrializes, inequality tends to increase because the benefits of growth are often limited to certain groups. But after reaching a certain level of income, further development usually leads to a reduction in inequality, as more people access education, better jobs, and social services. In simple terms, the curve suggests that inequality first worsens with growth, then improves as a country becomes wealthier. It helps explain the dynamic relationship between economic progress and social equity.