Econ 366 - Chapter 9

Econ 366 - Chapter 9 - Chapter 9 The Problem of Poverty 1....

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Chapter 9 The Problem of Poverty 1. Measures of Poverty 1. Demography of Poverty 1. Race and Poverty 1. Public Programs for Reducing Poverty Macroeconomic Income Maintenance 1. Further Steps
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1. Measurement of Poverty A. What is Poverty? 1. Not merely no money but no prospects 2. Not only money income but in-kind income 3. Assets must be taken into account 4. No naturally dividing line between poor and non-poor B. The official Poverty Line 1. Poor families spend one-third of income on food 2. Poverty line = 3 times low income (nutritious) diet 3. 4 member family – 1960:$3022, 1970:$3968, 1990:$13359 C. Poverty Measures 1. Poverty Population: No of people below the poverty line 2. Poverty Gap: Additional income the poor would need to escape poverty G = S(y p – y i )
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2. Demography of Poverty Pov ($) Med Inc ($) year No (ml) % Family 4 Family 1929 60 50 1947 48 33 1959 39.5 22.4 $2973 $5417 1969 24.1 12.1 $3743 $9433 1979 25.3 14.0 $7412 $19715 1989 31.5 12.8 $12,675 $28906 1990 33.6 13.6 $13,359 $29943
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Reasons for increase in poverty 1. Recession of 1980 and the more severe recession of 1982 2. Economy has grown more slowly since 1970 – income growth slow for both the poor and the rich 3. Sentiments for antipoverty programs were less favorable in 1980s but actual expenditures did not decline enough to explain the decline 4. Since 1980s there has been an increase in earnings inequality between the well-educated (whose earnings increased rapidly) and the less educated (whose income fell in real terms) 5. Cause: not sure but related to the widespread use of computers in all fields –manufacture, servicing, programming 6. Relaxation of international trade barriers - benefited highly educated workers and harmed poorly educated workers (abundant worldwide)
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Who are the poor Total 11.7 13.5
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This note was uploaded on 09/26/2009 for the course ECON 366 taught by Professor Sengupta during the Fall '08 term at USC.

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Econ 366 - Chapter 9 - Chapter 9 The Problem of Poverty 1....

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