Chapter 31 - Income distribution and poverty. In this chapter, the following content will be discussed: How unequal is income distribution in the United States? What determines how income is distributed? How does the distribution of income differ from the distribution of wealth? How is poverty defined? | Chapter 31 Income Distribution and Poverty 31-1 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives How unequal is income distribution in the United States? What determines how income is distributed? How does the distribution of income differ from the distribution of wealth? How is poverty defined? 31-2 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Who are the poor? What are the main government transfer payments for the poor? What are the causes of poverty? What are the solutions? 31-3 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Some Quotations “The forces of a capitalist society, if left unchecked, tend to make the rich richer and the poor poorer.” - Jawaharial Nehru “I’ve been rich and I’ve been poor; rich is better.” - Sophie Tucker 31-4 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Income Distribution in the United States How unequal is income distribution in the United States? How unequal are the incomes of The poor and the rich? The blacks and whites? The males and females? 31-5 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. The Lorenz Curve A Lorenz curve shows the cumulative share of income earned by each quintile of households A quintile is one-fifth (1/5) just like a quarter is one-fourth (1/4) One-fifth is also 20% 31-6 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. The Lorenz Curve Is it accurate to say that 20% of our population is poor, 60% is middle class, and 20% is rich? Maybe not Social scientist can’t agree about where to draw the dividing lines between the poor and the middle class and between the middle class and the rich 31-7 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. . Household Income, by Quintile, 1999 Lowest quintile $0 -16,799 Second quintile 16,800-30,828 Third quintile 30,829-49,015 Fourth quintile 49,016-76,009 Fifth . | Chapter 31 Income Distribution and Poverty 31-1 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives How unequal is income distribution in the United States? What determines how income is distributed? How does the distribution of income differ from the distribution of wealth? How is poverty defined? 31-2 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter Objectives Who are the poor? What are the main government transfer payments for the poor? What are the causes of poverty? What are the solutions? 31-3 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Some Quotations “The forces of a capitalist society, if left unchecked, tend to make the rich richer and the poor poorer.” - Jawaharial Nehru “I’ve been rich and I’ve been poor; rich is better.” - Sophie Tucker 31-4 Copyright 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Income Distribution in the United States How unequal is income .
