Explain two possible causes of income inequality in Indonesia.
Level
Marks
0
The work does not meet a standard described by the descriptors
below.
1
The written response is limited.
1-2
For one cause stated [1].
For two causes stated OR one cause explained [2].
2
The written response is accurate.
3-4
For one cause explained AND one cause stated [3].
For two causes explained [4].
Causes may include:
- inequality of opportunity;
as place of birth, parental background, and other social factors differ
- different levels of resource ownership;
owners of capital typically earn higher incomes
- different levels of human capital/skills;
limited access to training or to education (e.g. in rural areas)
- discrimination (gender, race and others);
women may not be promoted because expected to become mothers
- unequal status and power;
market concentration leads to transfer of surplus from consumers to producers
- corruption;
prevents redistribution, because funds are diverted towards those with political power
- government tax policy;
could be regressive, e.g. sales tax
- government transfer policies;
welfare payments to low-income families may be low in size and/or duration
- globalization and technological change;
loss of employment in industries that lose their comparative advantage
- market-based supply side policies;
deregulation and privatization may adversely affect wages
Any other valid cause.