Poverty, Inequality, and Discrimination - chapter 21

Credit constraint

inability to get a loan even though a person expects to be able to repay the loan plus interest.

Lorenz curve

a graphic representation of income distribution that maps percentage of the population against cumulative percentage of income earned by those people.

Discrimination

making choices by using generalizations based on people’s observable characteristics like race, gender, and age.

Purchase power parity index

index that describes the overall difference in prices of goods between countries.

Social insurance

government programs in which people pay into a common pool and are eligible to draw on benefits under certain circumstances.

income mobility

Measuring ________ in a country tells us how likely you are to end up rich is you start poor, or the opposite.

Gini coefficient

a single- number measure of income inequality; ranges from 0 to 1, with higher numbers meaning greater inequality.

Progressive taxation

________ reduces inequality, as it taxes the rich at a higher rate than the poor, narrowing the gap between the 2 groups.

Conditional cash

________ transfer: a program in which financial support is given only to people who engage in certain actions.

Income inequality

________ is commonly summarized by measuring the average income in each quintile of the population, or the percentage of total income held by people in each quintile.

Absolute poverty line

a measure that defines poverty as income below a certain amount, fixed at a given point in time.

consumer preferences

When ________ are not in agreement with the discrimination, markets will cause those who discriminate to lose profitable opportunities.

Income mobility

the ability to improve ones economic circumstances over time.

absolute poverty line

a measure that defines poverty as income below a certain amount, fixed at a given point in time

relative poverty line

a measure that defines poverty in terms of the income of the rest of the population

poverty rate

the percentage of the population that falls below the absolute poverty line

human capital

the set of skills, knowledge, experience, and talent that determine the productivity of workers

purchasing power parity (PPP) index

index that describes the overall difference in prices of goods between countries

credit constraint

inability to get a loan even though a person expects to be able to repay the loan plus interest

conditional cash transfer

a program in which financial support is given only to people who engage in certain actions

in-kind transfers

programs that provide specific goods or services, rather than cash, directly to needy recipients

social insurance

government programs in which people pay into a common pool and are eligible to draw on benefits under certain circumstances

Means-tested

the characteristic of a program that defines eligibility for benefits based on recipients income

Discrimination

making choices by using generalizations based on peoples observable characteristics like race, gender, and age