Chapter 20: Income Inequality, Poverty, and Discrimination

How income is distributed around the average

Displays quintile distribution of personal income

________ redistributes income from high to low income households.

Numerical measure of the overall dispersion of income

Movement of individuals + households between income quintiles

Provide goods/services rather than cash

Greater income equality (achieved through redistribution of income) comes at the opportunity cost of reduced production and income

Percent of population living in poverty

Social insurance + welfare; eligible persons ensured to benefits in programs

Partially replace earnings that have been lost due to retirement, disability, or temporary unemployment; they also provide health insurance for the elderly

Federal pension program that replaces part of the earnings lost when workers retire, become disabled, or die

Federal insurance program that provides health insurance benefits to those 65 or older and people who are disabled

Social insurance program that makes income available to workers who are unemployed

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

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

Basic welfare program for low-income families in the United States

Federal program (financed through general tax revenues) that permits eligible low-income persons to obtain vouchers that can be used to buy food

Federal program (financed by general tax revenues) that provides medical benefits to people covered by the SSI and TANF (basic welfare) programs

Refundable Federal tax credit provided to low-income wage earners to supplement their families’ incomes and encourage work

How income is distributed around the average

Dividing into 5 equal groups + examining % of total personal income of each quintile

Displays quintile distribution of personal income

Numerical measure of the overall dispersion of income

Movement of individuals + households between income quintiles

Provide goods/services rather than cash

Income equality maximizes total consumer satisfaction (utility) from any particular level of output and income

Income distribution determines amount of output/income produced + available to distribute

Greater income equality (achieved through redistribution of income) comes at the opportunity cost of reduced production and income

Percent of population living in poverty

Social insurance + welfare; eligible persons ensured to benefits in programs

Partially replace earnings that have been lost due to retirement, disability, or temporary unemployment; they also provide health insurance for the elderly

Federal pension program that replaces part of the earnings lost when workers retire, become disabled, or die

Federal insurance program that provides health insurance benefits to those 65 or older and people who are disabled

Social insurance program that makes income available to workers who are unemployed

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

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

Basic welfare program for low-income families in the United States

Federal program (financed through general tax revenues) that permits eligible low-income persons to obtain vouchers that can be used to buy food

Federal program (financed by general tax revenues) that provides medical benefits to people covered by the SSI and TANF (basic welfare) programs

Refundable Federal tax credit provided to low-income wage earners to supplement their families incomes and encourage work

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

Views discrimination as resulting from a preference or taste for which the discriminator is willing to pay

Amount of disutility

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

Crowding of women, African Americans, and certain ethnic groups into less desirable, lower-paying occupations

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

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

Amount of disutility

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

Crowding of women, African Americans, and certain ethnic groups into less desirable, lower-paying occupations