Chap013.5 - Slide 28 Recent Trends in Inequality ± Observations z From WWII to the 1970s income growth was almost 3/yr for all groups z From

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5 Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 25 ± Other Sources of the Wage Gap z Willingness to accept risk z Quality versus quantity of education z Courses taken and degrees pursued by sex and race Explaining Differences in Earnings Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 26 ± Winner-Take-All Markets z One in which small differences in human capital translate into large differences in pay Explaining Differences in Earnings Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 27 Mean Income Received by Families in Each Income Quintile and by the Top 5 Percent of Families, 1980-2000 (2000 dollars) Quintile 1980 2000 1990 Bottom 20 percent $ 12,756 $ 12,625 $ 14,232 Second 20 percent 27,769 29,448 32,268 Middle 20 percent 41,950 45,352 50,925 Fourth 20 percent 58,200 65,222 74,918 Top 20 percent 97,991 121,212 155,527 Top 5 percent 139,302 190,187 272,349 Chapter 13: Labor Markets, Poverty, and Income Distribution
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Unformatted text preview: Slide 28 Recent Trends in Inequality ± Observations z From WWII to the 1970s income growth was almost 3%/yr for all groups. z From 1980-2000 the income growth of the bottom 20% was less than half of 1%. z Real income of the top 1% more then doubled from 1980 - 2000. Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 29 Recent Trends in Inequality ± Observations z In 1980, CEOs earned 42 times as much as the average worker; today they earn 500 times as much. z The U.S. has a high degree of upward and downward economic mobility. Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 30 Why is Income Inequality a Moral Problem? ± Choosing the Rules for Distributing Income z Assume ² A “veil of ignorance” ² National income is fixed ² Most people are risk adverse ± How should income be allocated?...
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This note was uploaded on 02/20/2012 for the course ECON 202 taught by Professor Brightwell during the Spring '08 term at Texas A&M.

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