Ow can inequality undermine the development of a country?

a? Use italics for emphasis rather than bold.
a? All definitions should be referenced. Thereas no excuse a where you get your definition from, and what that definition is, matters. In fact, definitions can be quite contentious and change the meaning of the work significantly.
a? Have an appropriate number of headings, e.g. in a 2000 word essay it would be very hard to justify more than 4 headings (and one heading every 500 words seems quite excessive). In your shorter essays (anything below 2500 words) having more headings than this will lead to your essay being a?fractureda? and unable to sustain a flow. Remember that youare writing an argument, not a succession of statements on the topic.


According to Lindsey (1977), labor is described as one of the factors that can affects development of a country. Apart from increase rate of capital stock, the quantity and the quality of labor. It was stressed that, the improvements in the way labor and capital are used are important determinants of economic growth and moreso, that adding capital could imply corporate reducing and layoff hence it is better to examine labor as factor of growth (Lindsey, 1977).
When there is a continued increase in output of goods and services, be it total or per capita, there is economic growth (Niroomand & Nissan, 2008). Economic growth means additional earnings of the country which can be used for public services and additional earnings of its citizen also. Two growth themes were presented by Adam Smith and these are the classical sectoral analysis and the classical aggregate growth (Niroomand & Nissan, 2008). According to Niroomand and Nissan (2008), the first one considers the performance of individual industries and their contribution to the growth process while the latter a?provides explicitly the growth path subject to technical change due to division of labora?. They posited that scientific, technical and commercial specialization occurs due to the division of labor.
The laborers are humans; they are beings with various social connections and thus, they also have the one referred to as social capital. The process of norm creation leads to cooperation among groups and this makes them related with virtues such as honesty, maintenance of commitments, fulfillment of duties, and reciprocities (Castano, 2007). The effects of social capital to the economic growth have been studied by Castano (2007) through the following sources: family, associations, informal links, links in the workplace and the State. In these social connections, trust networks are also made giving rise to reciprocity among members, contributing to oneas social capital (Castano, 2007).
Castano (2007) noted a positive effect of social capital to the economy in the family and associations network when mobilize their financial resources to create companies or keep them running. Transaction costs can be also reduced by social capital since this could alleviate some costs required by a legal norm as said by Castano (2007).
As for the State, Castano (2007) mentioned three of its important roles that lead or promote social capital generation and these are the following: regulating the legal framework, promoting associative activities, and providing public education.

Human Capital as a Determinant of Economic Growth
The endogenous growth model posits that the accumulation of skills and education are important in economic growth (Williamson, 2008 pp. 229-230). Human capital refers to a?all of the attributes embodied in individuals that are relevant to economic activitya? (Bottone & Vania, 1994). It can be transferred between persons and it can also be developed over time (Ensley, Hmielieski, Siegel, & Wright, 2007). Human capital is modeled as an investment in education which in turn, is an investment of time and forgone earnings in exchange for pay in the future (Wilson, 2001).
The significance of human capital as a determinant of economic growth has been well noted in the existing body of knowledge. Osborne (2006) said that acquiring human capital is necessary in modernization. Castano (2007) stressed that it contributes to the growth of the economy. Chatterji (1998) also mentioned in his study that the initial level of human capital affects the growth process. The same was said by Park (1998) about human capital being a contributor to growth. Fraumeni and Jorgenson (1993) said that the predominant share of economic growth is not just contributed by nonhuman capital, but by the human capital as well. There is no diminishing marginal returns to human capital investments, thus growth is unbounded in the endogenous growth model (Williamson, 2008 p. 237).
Becker (1992) explained the importance of investments in human capital to facilitate economic growth. According to him, the growth of scientific and technical knowledge will result to an increase in labor productivity and other production inputs. Education, training, skills, medical care and values are all forms of human capital (Becker, 1992). Kodrzycki (2002) said that when the educational attainment of the population was raised, this contributed to national productivity growth and economic opportunities to disadvantaged groups in society were opened.
The importance of education as a human capital has been apparent in the literature. Smith (1991) said that to ensure the quality of the labor force in the future, education is very much necessary. During a personas lifetime, benefits accrue to an educated individual said Fraumeni and Jorgenson (1993) making education an excellent investment in human capital.
Through acquiring a certain level of schooling, the peopleas skills are enhanced and thus increasing their human capital. The higher the human capital, the more efficient it is to pass on skills and knowledge and at the same time, the higher the skills of the labor force the greater the output of production (Williamson, 2008 p. 236). Castano (2007) also said that education can be viewed as a way of increasing the economic agentsa productive potential.
The amount of education that a person receives is a significant determinant to the returns of human capital (Chatterji, 1998; Wilson 2001). Chatterji (1998) found out that tertiary education is more of a determinant to economic growth rather than having secondary education only. The benefits of having education have market and nonmarket values. Nonmarket benefits of education includes the value of activities such as parenting, enjoyment of leisure and increased education about earning power in labor market; the market value of education on one hand, is income (Fraumeni & Jorgenson, 1993).
Income Level: The Link between Educational Attainment and Economic Growth
To gauge the impact of educational attainment and economic growth, one must look into the individualas income. Fraumeni and Jorgenson (1993) said that people with higher education tend to have higher income when they become a member of the labor force. The same trend has been observed by Franks (2009) who said that level of educational attainment is a determinant of income level. An individualas lifetime income must be considered to properly gauge the value of educational investment (Fraumeni & Jorgenson, 1993).
Kang (1998) said that in the labor force, the higher level of educational attainment of the workers, the more effect it has as an equalizer of the income distribution; however the opposite effect is true when a larger dispersion of schooling exists among the labor force.
Inequality and Economic Growth
Niggle (1998) said that a?income distribution can influence growth through its influence over the ability of individuals to access education and invest in physical capital. The higher the income, the easier it is to access quality education. The higher the quality of education, the better the quality of the human capital acquired.
Another result of inequality in income is having unequal access to quality healthcare. Health is perceived to be an important element so laborers can do their work appropriately (Castano, 2007) or at the best, maximize their productivity. Having a healthy