Lecture+3 (1) - How Do the Poor Earn Income? Click to edit...

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Click to edit Master subtitle style 5/10/10 How Do the Poor Earn Income?
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5/10/10 Diversification Unlike the typical American household, the world’s poor tend to do a little of everything: Farming Small businesses (e.g., retail, food preparation) Wage work Temporary migration to larger cities, mines, rich countries
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% of HH with self- employment in % of HH with wage work in % of HH with income from multiple sectors Agricultur e Other Agricultur e Other Mexico- Rural 32% 17% 27% 27% 21% Mexico- Urban 14% 26% 12% 60% 25% India-Rural (Udaipur) 98% 6% 9% 91% 94% India-Urban (Hyderabad) 0% 16% 1% 91% 10% Indonesia- Rural 53% 36% 37% 33% 52%
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5/10/10 Diversification Even rural households with land tend to earn considerable income elsewhere: in Udaipur, almost all own land but only 19% say agriculture is their main source of income Much wage work is causal, i.e., not a reliable, regular job In most countries, urban households are a bit more specialized than rural
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5/10/10 How Hard Do the Poor Work? Under $1/ day $6-$10/day Mexico-Rural 46.1 44.6 Mexico-Urban 45.3 45.4 Indonesia- Rural 47.5 52.0 Indonesia- Urban 52.9 48.3 Ivory Coast- Rural 38.3 40.0 India-Urban (Hyderabad) 55.2 60.6 Average hours worked per week for men who work, age 18-50.
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5/10/10 How Hard Do the Poor Work? The poor seem to work quite a bit (though not near physical limits) For comparison: in the U.S., working men average around 41 hours The middle class may work slightly longer hours than the poor To what extent are working hours a choice?
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5/10/10 The Businesses of the Poor Most businesses require simple skills and have low startup costs. In Hyderabad: Tailoring (11%) Fruit, vegetable or milk sellers (14%) General stores (17%) Telephone booths (7%) Very little equipment. In Hyderabad, only 20% of businesses operate in a
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5/10/10 Do the Middle Class Operate Larger Businesses?
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This note was uploaded on 05/02/2010 for the course ECON Econ 311 taught by Professor Schnabl during the Spring '10 term at University of Delaware.

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Lecture+3 (1) - How Do the Poor Earn Income? Click to edit...

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