ECO 101 Chapter Notes - Chapter 20: Minimax, Negative Income Tax, Earned Income Tax Credit
Document Summary
Poverty rate- the percentage of the population whose family income falls below an absolute level called the poverty line. A commonly used gauge of the distribution of income. Poverty line- an absolute level of income set by the federal government for each family size below which a family is deemed to be in poverty. Poverty is correlated with race--> blacks and hispanic are more likely to live in poverty. Poverty is correlated with age--> children are more likely than average to be members of poor families, and elderly are less likely. Poverty is correlated with family consumption--> families headed by a female adult without a spouse present are about 5 times as likely to live in poverty as families headed by a married couples. In-kind transfers--> transfers to the poor given in the form of goods and services rather than cash. Not included in standard measurements of the degree of inequality.
