20a

13.3-1 Income Distribution in the U.S. and the Poverty Level

• Outline:
  • Income Distribution
  • Poverty

   

• Income Distribution
  • median income in the US in 2004 was $43,389
    • ME: "median" means that half the families earned less ans half earned more
    • doesn't tell ust how the incme is distributed
      • do most families earn about $43,00
      • or do some earn a lot more ans others a lot less?
  • Distribution by quintiles:

    

  • Changes over time:

    

    • little change from 1950-1990
    • 1990: top quintile begins to earn a greater share of all income
    • 2000: bottom quintile begins to earn a smaller share of all income
• Poverty Level (2004)
  • poverty level

    

    

  • poverty rate:
    • the % of families with invcomes below the poverty level
    • 2004: 12.7% of families in the US were living in poverty (about 1/8)
    • the poverty rate used to be much higher

      

    • poverty rates differ for different demographic groups
      • white families have lower rates than minorities
      • single mother headed households have higher rates
    • which families living in poverty CHANGES a lot
      • in any 10 year period, 4 families out of 10 will at some time be lining in pocerty in the united States
      • less than 3% od families live in poverty for long periods of time

        

  • What can be done?
    • progressive income taxes help the government pay for:
      • transfer payments
      • in-kind transfers
      • public goods
    • provide opportunities for acquiring human and financial capital

   

  • Incentive effects of poverty programs