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Reading/Study Guide – Chapter 20 – Income Inequality, Poverty, & Discrimination    

Terms:

  1. income inequality

  1. Lorenz curve

  1. Gini ratio

  1. income mobility

  1. noncash transfers

  1. equality-efficiency trade-off

  1. poverty rate

  1. entitlement programs

  1. social insurance programs

  1. Social Security

  1. Medicare

  1. Unemployment compensation

  1. public assistance programs

  1. Supplemental Security Income (SSI)

  1. Temporary Assistance for Needy Families (TANF)

  1. food-stamp program

  1. Medicaid

  1. earned-income tax credit

  1. Discrimination (EITC)

  1. taste for discrimination model

  1. discrimination coefficient

  1. statistical discrimination

  1. occupational segregation

Know/understand the above terms and be able to answer the following:

  1. Describe the distribution of income in the United States by personal income categories by households and quintile distribution by households.

  1. Explain how a Lorenz curve is used to describe income inequality.

  1. Explain how a Gini ratio measures income inequality and is related to the Lorenz curve.

  1. Discuss the impact of income mobility on income distribution data.

  1. Explain the broadened concept of income, which includes the effects of taxes and transfer payments, and how this affects the extent of inequality of income and poverty in the U.S.

  1. List seven causes of an unequal income distribution.

  1. Describe changes and causes for the changes in inequality since 1970.

  1. State and evaluate the cases for and against income inequality, using the equality vs. efficiency argument.

  1. Define poverty as the Federal government does.

  1. Identify the rate of poverty in the U.S., and the incidence of poverty for various demographic groups, including African-Americans, Hispanics, and female-headed households; identify some of the reasons for the poverty of each group.

  1. Identify the measurement issues that can make interpretation of poverty data difficult.
  2. Contrast social insurance and public assistance (welfare) programs.

  1. Describe the major social insurance programs.

  1. Describe and evaluate the major public assistance (welfare) programs.

  1. Explain the differences between social insurance programs and public assistance programs.

  1. Describe and evaluate the goals and conflicts inherent in public assistant programs.  

  1. Explain the criticisms of the old welfare system.

  1. Describe the major provisions of the Personal Responsibility Act of 1996.