A description of size and functional distribution of income

1. Size and Functional
Distribution of
Income
PREPARED BY SANDREA BUTCHER

2. Economists, politicians and other researchers have always tried to
explain how income is distributed.

3. In their efforts they have classified it by
size and by function.

4. Functional
Distribution of
Income

5. Functional distribution of income
divides national income between
the main resources

6. It divided the population into social classes and shared the
income according to the class.

7. It captured the proportion of income going to the owners of
the main resources.

8. It focuses on the source of income and distinguishes income
from employment and income from property.
Landowners (haves) and the others (have nots).

9. Functional distribution of income was the leading school of
thought up to the nineteenth century.
Three distinct classes were present.
Income earned Supplier
Rents Agricultural proprietors
Profits and interest Commercial and industrial
entrepreneurs
Wages Labourers

10. Size Distribution
of Income

11. Size distribution of income refers to the proportion of total
income received by various groups and focuses on
inequality of income between various income earners,
irrespective of the source from which the income is derived.
It can also be called personal distribution of income.

12. By the end of the nineteenth century the lines between the
social classes were becoming blurred.

13. Based on size distribution of
income someone could be at
the lower end of the earning
ladder and still own land.
Some capitalists
(entrepreneurs) such as
owners of small retail stores
are in the lower part of the
income scale.

14. Some wage earners (such as professional sportsmen) are at
the upper end of the income scale.

15. Many wage earners own company shares, through mutual
funds and life insurance policies.