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Lecture_9 - Lecture 9 Econ 2 Tracking the Economy Highest...

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Lecture 9 Econ 2
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Tracking the Economy Highest since 1982
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Tracking the Economy Why is productivity rising?
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Tracking the Economy Productivity = output / hours
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Wages and Income As we know, real per capita income has increased substantially
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U.S. per capita GDP and Trend 8x increase
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Who Has Gained? How have the gains been distributed across the population?
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Who Has Gained What we have learned so far: Lowest percentiles have not had much real wage growth For men in the bottom percentiles—zero or negative since 1973
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Who Has Gained What we have learned so far: Women in the lower percentiles have done slightly better than men
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Who Has Gained What we have learned so far: Relative wage of women to men has been increasing
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Who Has Gained? Basic picture: Incomes are becoming more unequal
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Inequality Inequality measures
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Inequality Many measures of inequality Ratios of various percentiles in the earnings distribution Gini coefficients ….many more
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Ratios of Percentiles Find the earnings at different percentiles of the earnings distribution Line everyone up according to their income Find out the earnings of those who are at the 1 st , 10 th , 50 th , 95 th etc Note: 50 th is the median
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Inequality Then look at, say, the relative earnings of someone at the 95 th percentile to that at the 50 th That is the “95 / 50” See how it has changed over time
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Inequality Lorenz Curve Developed in 1905 by Max Lorenz, a graduate student at U. of Wisconsin Gini coefficient was developed by an Italian statistician Corrado Gini Published in 1912 "Variabilità e mutabilità" ("Variability and Mutability").
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