MyEconLab Concept Video
Economic inequality arises from a wide variety of factors. The five key ones that we’ll examine here are
Financial and physical capital
Personal and family characteristics
Human capital is the accumulated skill and knowledge of human beings. To see how human capital differences affect economic inequality, we’ll study an econ-omy with two levels of human capital, which we’ll call high-skilled labor and low-skilled labor. Low-skilled labor might be law clerks, hospital orderlies, or bank tellers, and high-skilled labor might be attorneys, surgeons, or bank CEOs.