2- Inequality, living standards, emigration

Define living standards

Shapes well-being, mobility and productivity

What effect does inequality have

Decreased social cohesion and growth

How to create a mechanism to combat an issue

Identify who has problem and how much, then devise a mechanism to resolve the issue

GDP - Gross domestic product

GDP per capita

Total value from services provided and goods created within an economy in a period (A year)

GDP divided by population

Real household disposable income

Income for households after taxes adjusted for inflation

Draw a lorenz curve

What is the gini coefficient and what is the formula

The gini coefficient is the measure of the equality within an economy

Gini coefficient = A/A+B

What are drivers of inequality

Skill based technology improvements - Better pay for high end jobs, ai replacing routine tasks

Globalisation - Import competition, puts offshore pressure on sectors

Asset, housing and tax transferring systems - Wealthy accumulate more assets with spare income more assets = more income - cycles, Lower redistribution

What are consequences of inequality

Productivity Loss - talent trapped by credit/entry barriers, under-investment in human and physical capital, weak aggregate demand when marginal propensity to consume falls at the top

Increased crime and antisocial behaviour, lack of trust in institutions

Under investment in education and skills, Poverty increased - health issues, poverty trap

What is demography

The statistical study of human populations

What are core indicators for demography

Birth and death rates

Fertility rate

Population growth rate

Age-dependency ratio

Life expectancy at birth

What do population pyramids show

Wide base and narrow top - high feritility, youthful population

Narrow base and wide top - low fertility aging population

Indentations or bulges - show shocks to the population - Wars, Immigration , baby booms

What is the process of long run population change

High birth and death rates mean a small stable population

Death rates fall due to improved healthcare, sanitation

Birth rates fall - contraception, education

Population begins to age

In some advanced economies results in labour shortage increased dependency for labour

What are the effects of migration

Balanced labour supply

affects wages, productivity and demographics

Connects with inequality, living standards and ageing

Lil stat - 2023: over 11,000 migrants and asylum seekers arrived in Lampedusa, Italy → increasing migration flows
2022: 2.6 million people legally immigrated to the US, and OECD countries saw a record 6 million
permanent migrants

Causes of migration

Economic factors - higher wages and employment in other country

Political factors - war, tyrants

Climate change - extreme weather, droughts, rising sea levels

Chain migration - Migrants follow other migrants to areas due to information about jobs and housing

Explain the push pull framework

Push: poverty, unemployment, conflict, tyrants

Pull: wages, jobs, housing, security

Networks lower information and settlement costs

note migrants can also move within countries - US houston after hurricane katrina they moved to houston leading to average wage decreasing by 0.7% low skilled workers compared to high skilled

explain diag

Movement from high wage country to small wage country leads to high wage country decrease wage, and the opposite for small wage country , if the labour are perfect substitutes

Name some migration policies

Selective point systems (UK, Australia, Canada) prioritises skills

Border control (US)

Asylum policies - Germany taking in syrian refugees

Demographic policies (Advanced, ageing populations) attracting refugees (Japan and europe)

What is the migration hump theory

Increasing economic development leads to increased migration until origin country becomes wealthier leading to less migration

Give some examples of climate migration

Climate change could displace 150-300 million people by 2050 (Asian Development Bank, 2012)

Examples include - sea levels rising (kiribati and tuvalu)

drought in horn of africa (1.1 million somalis and 590 thousand ethiopians displaced),

sahara desert expansion (Farmers in Chad, niger and mali moving

Extreme weather (2018 hurricane maria - 500,000 puerto ricans came to the US