A Simple Model of Accumulated Earnings Inequality in a Human Society

Tim Liao, University of Illinois at Urbana-Champaign

In this analysis, we study the complex phenomenon of earnings inequality in society. To simplify the matter, we consider a single-sex (or really unisex) population that has a certain life expectancy at the arbitrary working age of 15. Each individual is able to search the landscape to gather and cumulate earnings. We allow their categorization into three classes, the lower, the middle, and the upper. We also consider the Mathew effect in earnings accumulation (or the rich get richer and the poor get poorer). The model monitors the Gini index and the three-class stratification over time to understand potential accumulated earnings polarization and stratification.