Inequality and Poverty

2006 Gini Index: 28

2016 Gini Index: 27.1   

    Above is a Lorenz curve for Finland that reflects the distribution of income within the economy. The blue line represents perfect equality, where 20% of the population earns 20% of the income and 40% of the population earns 40% of the income, and so on and so forth. The red line represents Finland's distribution of income in 2016 and the orange line represents Finland's distribution of income in 2006. As you can see, both curves are below the perfect equality line meaning that Finland has an unequal distribution of income. The further the curve is away from the line of perfect equality, the more unequal the distribution of income is. As you can see, the 2016 red line is above the orange 2006 line and is closer to the line of perfect equality; this means that in 2016, Finland had a better distribution of income than in 2006. 

    Another factor we can look at to compare inequality of income distribution is the Gini index. The lower the Gini index number, the less income inequality the country has. In 2006, Finland's Gini Index was 28 on a scale of 100, which is already relatively low compared to other countries around the world. Then we can see that in 2016, the Gini index fell to 27.1 which means that there was less income inequality in 2016 than in 2006. We came to this conclusion also by using the Lorenz curve, so using the Gini index is just another way to look at income inequality within a country and compare it over time or to other countries. So far, from the data, Finland is heading in the right direction and becoming more equal in income distribution!