Structural inequality occurs when the fabric of organizations, institutions, governments or social networks contains an embedded cultural, linguistic, economic, religious/belief, physical or identity based bias which provides advantages for some members and marginalizes or produces disadvantages for other members. This can involve, personal agency, freedom of expression, property rights, freedom of association, religious freedom, social status, or unequal access to health care, housing, education, physical, cultural, social, religious or political belief, financial resources or other social opportunities. Structural inequality is believed to be an embedded part of all known cultural groups.^{[citation needed]} The global history of slavery, serfdom, indentured servitude and other forms of coerced cultural or government mandated labour or economic exploitation that marginalizes individuals and the subsequent suppression of human rights (see UDHR) are key factors defining structural inequality.

Structural inequality can be encouraged and maintained in society through structured institutions such as state governments, and other cultural institutions like government run school systems with the goal of maintaining the existing governance/tax structure regardless of wealth, employment opportunities, and social standing of different identity groups by keeping minority students from high academic achievement in high school and college as well as in the workforce of the country. In the attempt to equalize allocation of state funding, policymakers evaluate the elements of disparity to determine an equalization of funding throughout school districts.

Formal equality of opportunity disregards collective dimensions of inequality, which are addressed by substantive equality with equality of outcomes for each group. Combating structural inequality therefore often requires the broad, policy based structural change on behalf of government organizations, and is often a critical component of poverty reduction. In many ways, a well-organized democratic government that can effectively combine moderate growth with redistributive policies stands the best chance of combating structural inequality.

Education is the base for equality. Specifically in the structuring of schools, the concept of tracking is believed by some scholars to create a social disparity in providing students an equal education. Schools have been found to have a unique acculturative process that helps to pattern self-perceptions and world views. Schools not only provide education but also a setting for students to develop into adults, form future social status and roles, and maintain social and organizational structures of society. Tracking is an educational term that indicates where students will be placed during their secondary school years.^[3] "Depending on how early students are separated into these tracks, determines the difficulty in changing from one track to another" (Grob, 2003, p. 202).

Tracking or sorting categorizes students into different groups based on standardized test scores. These groups or tracks are vocational, general, and academic. Students are sorted into groups that will determine educational and vocational outcomes for the future. The sorting that occurs in the educational system parallels the hierarchical social and economic structures in society. Thus, students are viewed and treated differently according to their individual track. Each track has a designed curriculum that is meant to fit the unique educational and social needs of each sorted group. Consequently, the information taught as well as the expectations of the teachers differ based on the track resulting in the creation of dissimilar classroom cultures.

Globally, the issue of spatial inequality is largely a result of disparities between urban and rural areas. A study commissioned by the United Nations University WIDER project has shown that for the twenty-six countries included in the study, spatial inequalities have been high and on the increase, especially for developing nations. Many of these inequalities were traced back to “second nature” geographic forces that describe the infrastructure a society has in place for facilitating the trade of goods and employment between economic agents. Another dominant and related factor is the ease of access to bodies of water and forms of long-distance trade like ports. The discrepancies between the growth of communities close to these bodies of water and those further away have been noted in cases between and within countries. In the United States and many other developed countries, spatial inequality has developed into more specific forms described by residential segregation and housing discrimination. This has especially come into focus as education and employment are often tied into where a household is located relative to urban centers, and a variety of metrics, from education levels to welfare benefits have been correlated to spatial data.

Specifically, studies have identified a number of economic consequences of housing segregation. Perhaps the most obvious is the isolation of minorities, which creates a deficit in the potential for developing human capital. Second, many of the public schools that areas of low socioeconomic status have access to are underperforming, in part due to the limited budgeting the district receives from the limited tax base in the same area. Finally, another large factor is simply the wealth and security homeownership represents. Property values rarely increase in areas where poverty is high in the first place.

The causes of spatial inequality, however, are more complex. The mid-20th century phenomenon of the large-scale migration of white middle-class families from urban centers has coined the term white flight. While the current state of housing discrimination can be partly attributed to this phenomenon, a larger set of institutionalized discrimination, like bias in loan and real estate industries and government policies, have helped to perpetuate the division created since then. These include bias found in the banking and real estate industries as well as discriminatory public policies that promote racial segregation. In addition, rising income inequality between blacks and whites since the 1970s have created affluent neighborhoods that tend to be composed of a homogeneous racial background of families within the same income bracket. A similar situation within the racial lines have helped to explain how more than 32% of blacks now live in suburbs. However, these new suburbs are often divided along racial lines, and a 1992 survey showed that 82% of blacks preferred to live a suburb where their race is in the majority. This is further aggravated by practices like racial steering, in which realtors guide home buyers towards neighborhood based on race.