tailieunhanh - Lecture Microeconomics (20/e): Chapter 21 - Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

Chapter 21 - Income inequality, poverty and discrimination. In this chapter we will explore income inequality and actions that can be taken by government to try to correct income inequality, using the Lorenz curve and Gini ratio to help with this evaluation. We will then define poverty and look at how it affects different groups. We will also discuss government programs to aid families in poverty. Lastly we analyze discrimination and how this impacts wages. | Chapter 21 Income Inequality, Poverty and Discrimination Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. In this chapter we will explore income inequality and actions that can be taken by government to try to correct income inequality, using the Lorenz curve and Gini ratio to help with this evaluation. We will then define poverty and look at how it affects different groups. We will also discuss government programs to aid families in poverty. Lastly we analyze discrimination and how this impacts wages. Facts About Income Inequality Average household income $69,821 in 2011 Among the highest in the world Distribution by quintiles Income mobility People change quintiles Government redistribution Taxes and transfers LO1 Income inequality is a continuing concern in much of the world. The classic case of the “haves” versus the “have-nots” has caused major disruptions in society. How . | Chapter 21 Income Inequality, Poverty and Discrimination Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. In this chapter we will explore income inequality and actions that can be taken by government to try to correct income inequality, using the Lorenz curve and Gini ratio to help with this evaluation. We will then define poverty and look at how it affects different groups. We will also discuss government programs to aid families in poverty. Lastly we analyze discrimination and how this impacts wages. Facts About Income Inequality Average household income $69,821 in 2011 Among the highest in the world Distribution by quintiles Income mobility People change quintiles Government redistribution Taxes and transfers LO1 Income inequality is a continuing concern in much of the world. The classic case of the “haves” versus the “have-nots” has caused major disruptions in society. How to correct the disparity is of great debate among many. The United States’ average household income of $69,821 is among the highest in the world, but the distribution of income among the different groups varies with the top 20% of households earning more than 51% of total income. Over an individual’s lifetime, the individual or household may change quintiles as income changes. The government also attempts to redistribute the income through taxes and transfers, such as welfare and Social Security. Facts About Income Inequality Lorenz curve and Gini ratio 20 40 60 80 100 20 40 60 80 100 0 Perfect Equality Lorenz Curve (Actual Distribution) Complete Inequality A B a b c d e f Gini Ratio = Area A Area A + Area B Percentage of Households Percentage of Income LO1 The Lorenz Curve is a graphical way to look at the relationship. The diagonal line that bisects the graph would illustrate perfect income equality, meaning all groups would have an equal distribution of income. Graphing the results .