Reducing the Wealth Gap with a Simulation-Based Proposal

Abstract

The United Nations Sustainable Development Goals (UN SDG 10) seek to reduce inequalities within and between countries. The root cause is the inequality of income distribution due to the poor distribution of global wealth. Each country deals with this problem on its own terms, and factors such as differences in country conditions, historical background, and inconsistency of data make running a comparison challenging. This study examines policy alternatives for complex and highly interactive socioeconomic structures using a highly reproducible simulator package that does not require simulation experience. No research has been found in the literature to have examined the effect of policy alternatives on the Gini coefficient in a simulated environment. Therefore, by reviewing the income distribution inequality measurement methods, this study evaluates basic policy components with a discrete event/agent-based simulation. In order to reduce the inequality of income distribution, a schedule has been proposed that includes a short-term shock program, gradual increase of the wealth tax by 20%-50%, and a transfer of 20% of the obtained funds to the poorest 20%. Attention has been drawn to questions that are useful for contributing to decision makers and for discussions on the political agenda.

Keywords

• wealth gap
• gini coefficient
• inequality
• simulation
• policy