1. Chapter 8 Global Stratification
Wealth and Poverty in Global Perspective
Problems in Studying Global Inequality
Classification of Economies by Income
Measuring Global Wealth and Poverty
Global Poverty and Human Development
Theories of Global Inequality
Global Inequality in the Future

2. What Is Global Stratification?
Unequal distribution of wealth, power, and prestige on a global basis.
Between 1960 and 1990, the gap in global income between the rich and poor countries continued to widen.

3. Studying Global Inequality
The “Three Worlds” Approach
Distinguishes nations based on economic development and standard of living.
Levels of Development Approach
Most controversial terminology used to describe global stratification.

4. Economic Categories Used by the World Bank
Low Income - nations with a GNP per capita of $785 or less, in 1998 dollars.
Middle-income - nations with a GNP per capita of more than $785 but less than $9,655 in 1998 dollars.
High-income Economies (25 nations)- nations with a per capita income of $9,655 or more in 1998 dollars.

5. Poverty
Absolute poverty- people do not have the means to secure the necessities of life.
Relative poverty- people can afford necessities but are unable to maintain an average standard of living.
Subjective poverty- actual income compared with income earner's expectations.

6. The Gini Coefficient
A measure of income inequality ranging from 0 (everyone has the same income) to 100 (one person receives all the income).
Indicates that global inequality between the rich and poor countries continues to exist.
Shows that similar disparities exist within nations in the world.

7. Human Development Index (HDI)
Criteria for measuring a country’s level of
development:
life expectancy
education
living standards

8. Theories of Global Inequality
Development and Modernization Theory
Dependency Theory
World System Theory

9. Development and Modernization Theory
Four Stages of Economic Development:
Traditional stage -very little social change takes place and people do not think of changing their present circumstances.
Take-off stage - period of economic growth accompanied by a growing belief in individualism, competition, and achievement.

10. Development and Modernization Theory
Four Stages of Economic Development:
Technological maturity- the country improves in technology, reinvests in new industries, and embraces the values and institutions of high-income developed nations.
High mass consumption - a high standard of living that encourages consumption.

11. Dependency Theory
Disputes that economic growth is the key to meeting important human needs in societies.
Argues that the poor nations are caught in a cycle of structured dependency on the richer nations.
Most often applied to the newly industrializing countries.

12. World System Theory Three types of nations:
Core nations- possess most of the world's capital and technology.
Semiperipheral nations- a midpoint between the core and peripheral.
Peripheral nations- dependent on core nations.

13. New International Division of Labor
Production is fragmented and assigned to whichever part of the world can provide the most profitable combination of capital and labor.
High-income countries have become dependent on low-income countries for labor.

14. Global Inequality In The Future
In some regions, poverty continues to undermine human development.
Modern technology and economic growth could reduce poverty and increase opportunities.
Health and education may continue to improve in lower-income countries, resulting in more advances.