Lecture+24+December+2

Lecture+24+December+2 - Todays agenda Distribution of...

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Unformatted text preview: Todays agenda Distribution of Income Inequality and poverty Anti-poverty policies Tradeoff between equality and efficiency The Purpose of the Welfare State Alleviate inequality and poverty Provide social insurance Functional distribution of income The produce of the earth is divided among three classes of the community; namely the proprietor of the land, the owner of the capital necessary for its cultivation, and the laborers by whose industry it is cultivated. Focus on source of the income Wages, interest, profit, etc. David Ricardo Functional distribution of income today Interest 11% Employee compensation 74% Proprietors income 8% Corporate profits 8% Distribution of income Functional distribution of income Across income sources Wages, interest, profit, ... Size distribution of income Across households Ignores income source Size distribution of income Family income rank Percentage share of total income Lowest fifth 4.1 Second fifth 9.9 Middle fifth 15.7 Fourth fifth 23.3 Highest fifth 47.0 100.0 Share of top 5 percent 20.8 Size distribution of income Income percentile Cumulative share of families Percentage share of income Cumulative share of income 0-20 20 4.1 4.1 20-40 40 9.9 14.0 40-60 60 15.7 29.7 60-80 80 23.3 53.0 80-100 100 47.0 100.0 Size distribution of income Income percentile Cumulative share of families Percentage share of income Cumulative share of income 0-20 20 4.1 4.1 20-40 40 9.9 14.0 40-60 60 15.7 29.7 60-80 80 23.3 53.0 80-100 100 47.0 100.0 Size distribution of income Income percentile Cumulative share of families Percentage share of income Cumulative share of income 0-20 20 4.1 4.1 20-40 40 9.9 14.0 40-60 60 15.7 29.7 60-80 80 23.3 53.0 80-100 100 47.0 100.0 Size distribution of income Income percentile Cumulative share of families Percentage share of income Cumulative share of income 0-20 20 4.1 4.1 20-40 40 9.9 14.0 40-60 60 15.7 29.7 60-80 80 23.3 53.0 80-100 100 47.0 100.0 Size distribution of income...
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This note was uploaded on 11/10/2011 for the course ECON 220:102 taught by Professor Rubin during the Fall '11 term at Rutgers.

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Lecture+24+December+2 - Todays agenda Distribution of...

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