...Income Mobility: Up & Down the Economic Ladder by Tom Thompson Dr.Walker Senior Seminar 7/29/2009 Thomas L. Thompson Dr. Christopher Walker Senior Seminar July 29, 2009 Income Mobility: Up & Down the Economic Ladder People always say they do what they do to make life better not only for themselves, but for the future well-being of their children and hopefully those actions will get passed on to their children. This is my way of thinking of the paying it forward theory; giving all I have, to make the lives of my children better than the one I grew up with and the one I currently live. One of my most favorite quotes about getting ahead in life came from a philosopher and pastor Russell Conwell that is hand-written by my grandmother in a Bible that was given to me some years ago. It goes like this, “For a man to say, I do not want money, is to say, I do not wish to do any good to my fellow men" (Conwell). Everyone wants money, only if it is to do good for your family’s future. From the rich business professional perched high in their penthouse to the lowly street peddler on the corner, everyone has a story on how and why they ended up in that position. The United States is seen as the place where everyone has the opportunity of the “American Dream”. That includes the opportunity for one's children to grow up and attain to their fullest potential in which they are capable of, and seen for what they are and not what they are born with. It is the opportunity...
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...Democracy, Religion and Inequality University of Groningen Faculty of Economics and Business Bachelor Thesis International Economics and Business Name Student: Yitian Jing Student ID Number: s2012790 Student email: y.jing@student.rug.nl Date Thesis: Jun. 5th, 2012 Name Supervisor: Dr. Robbert K. J. Maseland First and foremost, I would like to express my sincere appreciation and gratitude to my advisor, Dr. R. K. J. Maseland, for his academic guidance and encouragement throughout the research. He has been very generous sharing his experiences on institutional and cultural determinants on economy, as well as on academic research methodology and beyond. I would not have finished such a thesis paper without his support. His effort and patience would never be forgotten. Abstract The democracy’s inequality decreasing effect has been appealing to researchers for long but lacks concentrated argumentation and empirical evidence, as well as the interaction between democracy and religion. This paper conduct an empirical analysis covering time period of 1978-2010 with 86 countries to test the hypotheses of whether democracy decreases inequality and whether an egalitarian religion decreases the influence of democracy. The result shows the direct effect of democracy is weak, however, the hypothesis of religion’s effect on the democracy’s influence is partially confirmed. Therefore, democracy itself has minor influence on inequality while a large proportion of the effect is...
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...Bus301: Business Ethics I have to admit that even though the Occupy Wall Street Movement has been all over the news I did not truly understand the stance of it, nor did I really get involved with it. While doing research for this paper I was able to get a better understanding of the basis of the movement as well as the facts pertaining to it. The movement started on Wall Street but has spread across the US. The basis of the movement focuses on social & economic inequality, greed, corruption and the influence of corporations on the US government, primarily from the financial sectors of businesses. The main slogan of Occupy Wall Street (OWS) is we are the 99%, which addresses the growing income inequality and wealth distribution in the US between the wealthiest 1% and the rest of the population. Huffington Post reporter, Paul Taylor said the slogan is "arguably the most successful slogan since 'Hell no, we won't go,'" of Vietnam war era, and that the majority of Democrats, independents and Republicans see the income gap as causing social friction The initial basis of the movement was to protest the global crisis of monetary insolvency, and the increasing disparity of wealth. Without offices, paid staff, or a bank account, Occupy Wall Street quickly spread beyond New York. People gathered in Boston, Chicago, Los Angeles, Portland, Atlanta, San Diego, and hundreds of other cities around the United States and claimed the right of we the people to create a world that works for the...
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...Name Professor Course Date Inequality in China Over the past few years, China’s economy has been booming and, therefore, lifting millions of its citizens above the poverty line. Consequently, China’s GDP has increased, implying widening of the gap between the rich and the poor. According to Aljazeera, in 2010 China recorded a very high Gini coefficient of 0.61 (Duggan, “Income inequality on the rise in China”) The Gini coefficient shows income distribution in a country, and hence inequality levels. This means that the inequality in China is very high as the Gini coefficient of one represents total inequality while zero Gini coefficients represents perfect equality. In large cities such as Shanghai, inequality is evidenced by the presence of extremely rich citizens and beggars with plastic cups sitting on the streets. The Chinese government needs to implement a taxation policy that accommodates all its citizens from the richest to the poorest. The problem of Income inequality can be solved by reducing the tax rates for low wage earners and increasing the rates for high income earners (Xiang, “Narrowing Gap between Rich and Poor”). There has been a close correlation between human rights and productivity. Many economic analysts argue that when China was poor there was relative equality in the country. While this argument may be true, human rights depend on the economic structure and cultural structure that surround the people. Economic structure defines the behavioral freedom...
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...1) Derived demand is used in economics to describe the demand that is placed on goods or a good or service as a consequence of changes in the price for some other related good or service. It is a demand for some physical or intangible item where a market exists for both related goods and services in question. The derived demand can have a significant impact on the derived good's market price. The concept of derived demand helps to control the demand for labor through one product needing the use of another product. (Tejvan Pettinger, November 28, 2012) 2) The factors that govern the source of labor in a market are buyers and sellers. Most markets we come across individual people such as you and I and groups of people such as families that needs goods and services and the firms which supply goods and services, such as stores. The labor market works in a parallel way, except the roles are reverse. This market, mostly all firms require labor and individuals such as you and I supply their requirement for a wage compensation. By looking for a job, you are participating actively in the market of labor. The labor market works much like other markets. There are buyers and sellers and they both interact with one another to determine a price of an item. In this case, the "good" being bought and sold is labor and the price for that good is the wage compensation mention earlier. That is, in the labor market, employers are willing to buy more hours of labor at lower wages than at a higher...
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...MUMBAI. MAY 3, 2011 SOCIO-ECONOMIC CLASSIFICATION-2011 The New SEC system THE NEW SEC SYSTEM What is the new SEC system? How do we classify 01 a household in the new SEC system? 02 What are the advantages/ drawbacks of the new SEC system? How was the new SEC system 03 created? What are the 04 other systems that we considered? What is 05 the performance of the new SEC system? 06 07 Conclusion THE NEW SEC SYSTEM 01 What is the new SEC system? 3 THE NEW SEC SYSTEM THE NEW SEC SYSTEM The new SEC system is used to classify households in India. It’s based on two variables: • Education of chief earner • Number of “consumer durables” ( from a predefined list)- owned by the family. The list has 11 items, ranging from ‘electricity connection’ and ‘agricultural land’- to cars and air conditioners We have 12 grades in the new SEC system, ranging from A1 to E3 4 THE NEW SEC SYSTEM DISTRIBUTION OF HOUSEHOLDS India ( urban + rural ) New SEC System 18.4 14.7 11.4 9.7 7.5 3.2 1.8 0.4 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 7.9 5.3 15.4 4.3 *Figures in percentage This round of analysis has been conducted using data from IRS 2008 (round 20)*. We have drawn a sub-sample of 39,441 5 THE NEW SEC SYSTEM DISTRIBUTION OF HOUSEHOLDS Urban New SEC System 12.9 11.6 10.2 7.6 5.1 8.6 13.2 12.6 9.8 4.7 2.6 1.1 A1 A2 A3 B1 B2 C1 C2 D1 D2 E1 E2 E3 ...
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...Income Inequality and Economic Well Being Income inequality is prevalent in the entire economic global economy with its effects clearly visible in form of differences in pay scales, distribution per household etc. The economic well-being is not measured in the terms of income alone, but also by other factors such as satisfaction levels, education standards, quality of life etc contribute towards well-being. The causes of the income inequality broadly fall into two categories: the market forces and the institutional forces. The market forces includes the technological advances and the increased trade, making the highly educated and more skill work force more productive thus increasing their wages whereas the institutional forces like deregulation leading to decline of unions and stagnation in the minimum wage in the recent years. Despite the fact that the level of income distribution has become skewed over the decade, the quality of life, due to various advancements has improved. Better quality products can be purchased at lower prices, which in-turn has improved the standard of living over the past decade. It is a common fact that the richer are happier than the poor. But well being is a matter of perception as well. People asses their well being by comparing their past and current circumstances, and by comparing their current standard with that of others. The Easterlin Paradox, which was developed by Richard Easterlin,, states that “although at some point in time richer...
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...● 01. 6 generalizations about institutions 1. People use institutions to serve specific ends. 2. They divide labor .3. Institutions save everyone's time and energy; in technical language, they reduce transaction costs. 4. Institutions exist independently of the particular people participating in them. 5. Institutions distribute authority. More power inheres in some roles than in others. 6. Participants will attempt to adapt it to their own purposes; but they are difficult to change. ● 02.How do institutions check tyranny? - checks and balances:Social pluralism, we divide government up between three institutions with all the same amount of power, ● 03.Why are institutions difficult to change? Path dependency: reliance on experience, constrained by status quo; solutions based on familiar institutions. Some participants are content with current arrangements and not willing to change. ● 04.Framers consciously designed a set of institutions for making it possible to do politics of this kind. The point is to design a set of institutions that control the effects of factions--by setting them against one another, but dividing authority among institutions ● Problems with the Articles of confederation No ability to tax , No central currency, No way to negotiate treaties ,No executive capacity, difficult to maintain public order, nation security. ● 06.Deals addressed by the constitution Path dependency: reliance on experience, constrained by status quo; solutions based on familiar...
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...convinces the developing countries to take actions on the population control; Welfare Economics help balance the living standard between the poor and the rich in some way. These are the changes I wish to make myself. It might not be the most direct way to help people or even a country sort out their financial problems like journalists or social workers do but it is the way that truly make a difference because the power of great thoughts can change the world fundamentally. I would like to be part of it, by making some contributions on Economics. Inspired by Capital in the Twenty-First Century, I am writing an essay about the distinction of distribution with my classmate. I have witnessed the inequality of income distribution : my mother worked as a contract worker for a company where her monthly income was half as much as a regular employee even if her workload was not less than any of her colleagues’ and the work performance is considerably...
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...models have found that in the world, just the top 20% of the population controls over 70% of the global revenue. These economies have been growing as well. The importance of this investigation is answering the questions: Are they reversing this lack of equality trend? And, Would be relevant to add equity in the development agenda?. This paper offers an analysis of these points and studies them as a strategy for sustainability and continuous growth. Key words: BRICS countries growth; National income distribution; Equity in the development agenda. 1. Introduction BRICS Countries are leading the growth of the economy in the world, and have done so for over 10 years. The International Monetary Fund (IMF) projected that from 2013 to 2017 it will maintain its growth at least 26% above World Growth GDP. Note: GDP, will be the measure utilized in this paper when referring to growing economies. This information comes from the IMF data base and calculations made by the author. Income distribution refers to how a nation’s total GDP is distributed among its population (Sullivan and Sheffrin, 2003)....
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...the sustainability of tax revenue (Mak, 2006). They have also cited some examples from countries all over the world which have already imposed GST such as most of the Organization for Economic Cooperation and Development (OECD) countries and Pacific Asian countries (Yu, 2002). In spite of these, after considering the social context and environmental factors, the tax should not be imposed in Hong Kong since it will cause social discontent, hurt the economy and have low cost-effectiveness. First, social discontent will arise as a result of the implementation of GST. The GST is renowned for its regressivity, which is attributed to a widening effect on income disparity (Kato, 2003). Income disparity, which can be measured by Gini Coefficient, is an important social issue in modern cities (Callig, 2007). High degree of income gap is a serious socioeconomic problem, which will eventually lead to social discontent as the underprivileged cannot get their deserved treatment in society and may become highly unsatisfied. In extreme cases, social upheaval will break out. Currently Hong Kong is a place where Gini Coefficient measured in 2006 stood a record high of 0.533 (Economic Analysis Division, 2007). When compared internationally, it is among the highest, even as high as those in third world countries (Pang & Lau, 2007), therefore we cannot tolerate further increase in the figure. The government, who are aware of the problem of regressivity of GST, claims that they will offer offset...
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...Income Inequality In Chapter 20 of microeconomics one of the main points to this chapter is to understand income inequality and what causes income inequality. The three points I think they are very important to understand income inequality is the definition, and two examples of what causes income inequality. Education and training and discrimination are two examples that can give a more visual perspective of what income inequality is. The definition to income inequality according to the McConnell “Income Inequality is the distribution of an economy’s total income among households or families” McConnell (411) The concept of inequality is distinct from that of poverty and fairness. Income inequalities are used by to measure the distribution of income, and economic inequality among the participants in a particular economy, such as that of a specific country or of the world in general. According to the webpage businessdictionary.com “While different theories may try to explain how income inequality comes about, income inequality simply provide a system of measurement used to determine the dispersion of incomes.” In the text book from economics the author said “There are several causes of income inequality in the United States. In general, the market system is permissive of a high degree of income inequality because it rewards individuals based on the contributions that they make, or the resources that they own, in producing society’s output” McConnell (414) One of the main factors...
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...GINI Index GINI index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The GINI index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus a GINI index of 0 represents perfect equality, while an index of 100 implies perfect inequality. GINI of Income A table containing the GINI indicator of income of Bangladesh over the years is given below: Year | National | Rural | urban | 1973-74 | .36 | .35 | .38 | 1981-82 | .39 | .36 | .41 | 1983-84 | .36 | .35 | .37 | 1985-86 | .38 | .36 | .37 | 1988-89 | .38 | .37 | .38 | 1991-92 | .39 | .36 | .40 | 1995-96 | .43 | .38 | .44 | 2000 | .45 | .39 | .50 | 2005 | .47 | .43 | .50 | 2010 | .46 | .43 | .45 | Table: GINI of income for Bangladesh from 1973 to 2010 A graphical representation showing the comparative difference among national rural and urban GINI for income in Bangladesh is given below: Figure: Income GINI index by rural urban area GINI of Expenditure A table containing the GINI indicator of Expenditure of Bangladesh over the years is given below: Year | National | Rural | Urban | 1991-1992 | .26...
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...Income inequality Name Date Abstract In any given population, there is a difference between what people within the population earn. The uneven distribution of income in any given population is income inequality. In order for there to be income, there has to be several sources of income. These sources of income may be combinational or independent per person receiving the income. Income may result from wages, rent, bank account interests, salaries or even profits made in business transactions ( Stiglitz, 2012). In his hypothesis, Karl Marx foresaw income inequality in a capitalistic as a major problem that would lead to an economic evolution. The main reason he foresaw an evolution was due to the recurrent nature of income inequality. In an income inequality situation, the richer keep getting richer due to a better income, while the poor keep getting poorer. The gap between the top earners and the low-income earners keeps widening in an income inequality situation. In America, almost 95% of the national wealth is under 5% ownership; this situation leaves 95% of the population to scrounge for the limited 5% wealth (DeNavas et. Al, 2005). Introduction In order to understand the complexities of economic inequality, the best specimen to use for the study is a family. In the study, the family’s income is under analysis, and then the family members ranked from the lowest income earner to the highest income earner. After the ranking, the incomes aid in establishing a Lorenz...
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...Issues in inequality in non-income dimensions Achin Chakraborty Institute of Development Studies Kolkata 1, Reformatory Street, 5th Floor Calcutta University Alipore Campus Kolkata 700 027 India achinchak@rediffmail.com Abstract There are two basic approaches to measuring inequality in non-income dimensions. One views inequality as variation of an outcome indicator across individuals and the other views inequality as essentially disparities across socioeconomic groups. While the latter view now dominates the inequality measurement in health, measurement of education inequalities has so far taken the first view. In this paper, we have argued the importance of reckoning inequality in socio-economic group terms and advocated use of an ‘education concentration index’ exactly in the same way as the health concentration index measures socio-economic inequalities in health. The index has been applied to the Indian data to reckon two kinds of inequalities in educational attainment (years of education) – one across economic classes and the other across socially identified groups such as the Scheduled Tribes, Scheduled Castes and others. We find a strong correlation between the two types of inequalities across the states of India. We also find, as one would expect, that the inequality index values are negatively correlated with the average years of education. However, in actual policy context, analysis of the outliers...
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