Suppose that earnings instability (such that income can go up or down)increases for the lower 20 percent of the workforce.The increase in inequality as measured by the 90:10 ratio will ________ the increase as measured by the 80:20 ratio.

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The 90:10 ratio measures the income gap between the top 10% and bottom 10% of earners, while the 80:20 ratio measures the income gap between the top 20% and bottom 20% of earners. If earnings instability increases for the lower 20% of the workforce, this means that the incomes of the bottom 10% of earners will become more volatile, while the incomes of the top 10% of earners will remain relatively stable. This will lead to a widening of the income gap between the top 10% and bottom 10% of earners, and therefore a greater increase in the 90:10 ratio compared to the 80:20 ratio.

Suppose That Earnings Instability (Such That Income Can Go Up