Econ chapter 20 – Flashcards
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income inequality
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The unequal distribution of an economy's total income among households or families.
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Lorenz curve
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A curve showing the distribution of income in an economy. The cumulated percentage of families (income receivers) is measured along the horizontal axis and the cumulated percentage of income is measured along the vertical axis.
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Gini ratio
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A numerical measure of the overall dispersion of income among households, families, or individuals; found graphically by dividing the area between the diagonal line and the Lorenz curve by the entire area below the diagonal line.
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income mobility
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The extent to which income receivers move from one part of the income distribution to another over some period of time.
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noncash transfers
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A government transfer payment in the form of goods and services rather than money, for example, food stamps, housing assistance, and job training; also called in-kind transfers.
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equality-efficiency trade-off
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The decrease in economic efficiency that may accompany a decrease in income inequality; the presumption that some income inequality is required to achieve economic efficiency.
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poverty rate
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The percentage of the population with incomes below the official poverty income levels that are established by the Federal government.
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entitlement programs
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Government programs such as social insurance, Medicare, and Medicaid that guarantee particular levels of transfer payments or noncash benefits to all who fit the programs' criteria.
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social insurance programs
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Programs that replace the earnings lost when people retire or are temporarily unemployed, that are financed by payroll taxes, and that are viewed as earned rights (rather than charity).
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Social Security
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The social insurance program in the United States financed by Federal payroll taxes on employers and employees and designed to replace a portion of the earnings lost when workers become disabled, retire, or die.
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Medicare
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A Federal program that is financed by payroll taxes and provides for (1) compulsory hospital insurance for senior citizens, (2) low-cost voluntary insurance to help older Americans pay physicians' fees, and (3) subsidized insurance to buy prescription drugs.
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unemployment compensation
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The social insurance program that in the United States is financed by state payroll taxes on employers and makes income available to workers who become unemployed and are unable to find jobs.
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public assistance programs
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Government programs that pay benefits to those who are unable to earn income (because of permanent disabilities or because they have very low income and dependent children); financed by general tax revenues and viewed as public charity (rather than earned rights).
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Supplemental Security Income (SSI)
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A federally financed and administered program that provides a uniform nationwide minimum income for the aged, blind, and disabled who do not qualify for benefits under Social Security in the United States.
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Temporary Assistance for Needy Families (TANF)
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A state-administered and partly federally funded program in the United States that provides financial aid to poor families; the basic welfare program for low-income families in the United States; contains time limits and work requirements.
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Supplemental Nutrition Assistance Program (SNAP)
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A government program that provides food money to low-income recipients by depositing electronic money onto special debit cards. Formerly known as the food-stamp program.
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Medicaid
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A Federal program that helps finance the medical expenses of individuals covered by the Supplemental Security Income (SSI) and Temporary Assistance for Needy Families (TANF) programs.
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earned-income tax credit (EITC)
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A refundable Federal tax credit for low-income working people designed to reduce poverty and encourage labor-force participation.
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discrimination
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The practice of according individuals or groups inferior treatment in hiring, occupational access, education and training, promotion, wage rates, or working conditions even though they have the same abilities, education, skills, and work experience as other workers.
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taste for discrimination model
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A theory that views discrimination as a preference for which an employer is willing to pay.
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discrimination coefficient
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A measure of the cost or disutility of prejudice; the monetary amount an employer is willing to pay to hire a preferred worker rather than a nonpreferred worker.
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statistical discrimination
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The practice of judging an individual on the basis of the average characteristics of the group to which he or she belongs rather than on his or her own personal characteristics.
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occupational segregation
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The crowding of women or minorities into less desirable, lower-paying occupations.
