This relationship is mainly referred to as the ‘Kuznets curve’ (Themudo 2013, p. 11). The curve has taken a U- shape effect on defining the income per capita on the inequality in industrialization and labour migration. Some of the additional factors that have brought about income inequality include government social expenditures and failures in government strategies. Income inequalities were found to be negatively correlated with the total government expenditure on social sector. The modifications put forward were realized on progressive taxation, and income transfers had relatively unstable factors in improving the distribution of income (Santis 2012, p. 12). For this reason, one can draw a conclusion that the development of financial services in solving of income inequalities is not straight- forward and …show more content…
3). A direct causal relationship occurs when reduced investment is realized in regards to educational development in the environment outside school. These investments may range from after school coaching, extra educational materials, educational trips, holidays, food and transport, high- quality classrooms among others. In the later stages of the educational processes, the direct effects of income inequality become more visible because parents from lower income households lack the necessary resources (Rodriguez-Pose & Tselios 2008, p. 9). The parents may lack enough income to fund their children’s education from the early schooling all through to higher education. It causes adverse effects on the educational enhancement of children that come from these households (Blanden & Gregg 2004, p.