Studied by 5 peopleIncome inequality
How income is distributed around the average
Lorenz curve
Displays quintile distribution of personal income
Govt
________ redistributes income from high to low income households.
Gini ratio
Numerical measure of the overall dispersion of income
Income mobility
Movement of individuals + households between income quintiles
Non-cash transfers
Provide goods/services rather than cash
Equality-efficiency trade-off
Greater income equality (achieved through redistribution of income) comes at the opportunity cost of reduced production and income
Poverty rate
Percent of population living in poverty
Entitlement programs
Social insurance + welfare; eligible persons ensured to benefits in programs
Social insurance programs
Partially replace earnings that have been lost due to retirement, disability, or temporary unemployment; they also provide health insurance for the elderly
Social Security
Federal pension program that replaces part of the earnings lost when workers retire, become disabled, or die
Medicare
Federal insurance program that provides health insurance benefits to those 65 or older and people who are disabled
Unemployment compensation
Social insurance program that makes income available to workers who are unemployed
Public assistance programs
Provide benefits to people who are unable to earn income because of permanent disabling conditions or who have no or very low income and also have dependent children
Supplemental Security Income (SSI)
Provides a uniform nationwide minimum income for the aged, blind, and disabled who are unable to work and who do not qualify for Social Security aid
Temporary Assistance for Needy Families (TANF)
Basic welfare program for low-income families in the United States
Food stamp program
Federal program (financed through general tax revenues) that permits eligible low-income persons to obtain vouchers that can be used to buy food
Medicaid
Federal program (financed by general tax revenues) that provides medical benefits to people covered by the SSI and TANF (basic welfare) programs
Earned income tax credit (EITC)
Refundable Federal tax credit provided to low-income wage earners to supplement their families’ incomes and encourage work
Income inequality
How income is distributed around the average
Distribution by quintiles (fifths)
Dividing into 5 equal groups + examining % of total personal income of each quintile
Lorenz curve
Displays quintile distribution of personal income
Gini ratio
Numerical measure of the overall dispersion of income
Income mobility
Movement of individuals + households between income quintiles
Non-cash transfers
Provide goods/services rather than cash
Case for equality
Income equality maximizes total consumer satisfaction (utility) from any particular level of output and income
Case for inequality
Income distribution determines amount of output/income produced + available to distribute
Equality-efficiency trade-off
Greater income equality (achieved through redistribution of income) comes at the opportunity cost of reduced production and income
Poverty rate
Percent of population living in poverty
Entitlement programs
Social insurance + welfare; eligible persons ensured to benefits in programs
Social insurance programs
Partially replace earnings that have been lost due to retirement, disability, or temporary unemployment; they also provide health insurance for the elderly
Social Security
Federal pension program that replaces part of the earnings lost when workers retire, become disabled, or die
Medicare
Federal insurance program that provides health insurance benefits to those 65 or older and people who are disabled
Unemployment compensation
Social insurance program that makes income available to workers who are unemployed
Public assistance programs
Provide benefits to people who are unable to earn income because of permanent disabling conditions or who have no or very low income and also have dependent children
Supplemental Security Income (SSI)
Provides a uniform nationwide minimum income for the aged, blind, and disabled who are unable to work and who do not qualify for Social Security aid
Temporary Assistance for Needy Families (TANF)
Basic welfare program for low-income families in the United States
Food stamp program
Federal program (financed through general tax revenues) that permits eligible low-income persons to obtain vouchers that can be used to buy food
Medicaid
Federal program (financed by general tax revenues) that provides medical benefits to people covered by the SSI and TANF (basic welfare) programs
Earned income tax credit (EITC)
Refundable Federal tax credit provided to low-income wage earners to supplement their families incomes and encourage work
Discrimination
Practice of according people inferior treatment (for example, in hiring, occupational access, education and training, promotion, wage rate, or working conditions) on the basis of some factor such as race, gender, or ethnicity
Taste for discrimination model
Views discrimination as resulting from a preference or taste for which the discriminator is willing to pay
Discrimination coefficient
Amount of disutility
Statistical discrimination
People are judged on the basis of the average characteristics of the group to which they belong, rather than on their own personal characteristics or productivity
Occupational segregation
Crowding of women, African Americans, and certain ethnic groups into less desirable, lower-paying occupations
Discrimination
Practice of according people inferior treatment (for example, in hiring, occupational access, education and training, promotion, wage rate, or working conditions) on the basis of some factor such as race, gender, or ethnicity
Taste for discrimination model
Views discrimination as resulting from a preference or taste for which the discriminator is willing to pay. The model assumes that, for whatever reason, prejudiced people experience a subjective or psychic cost—a disutility—whenever they must interact with those they are biased against
Discrimination coefficient
Amount of disutility
Statistical discrimination
People are judged on the basis of the average characteristics of the group to which they belong, rather than on their own personal characteristics or productivity
Occupational segregation
Crowding of women, African Americans, and certain ethnic groups into less desirable, lower-paying occupations
Note
Flashcard