Chapter 30
Income, Poverty,
and Health Care
Introduction
Three decades ago, the annual earnings of female
workers in the United States averaged about 63 percent
of an...
Learning Objectives
• Describe how to use a Lorenz curve to
represent a nation’s income distribution
• Identify the key de...
Learning Objectives (cont'd)
• Distinguish among alternative approaches
to measuring and addressing poverty
• Recognize th...
Chapter Outline
•
•
•
•
•

Income
Determinants of Income Differences
Theories of Desired Income Distribution
Poverty and A...
Did You Know That ...
• Today, only 51 percent of adult U.S.
residents are married, as compared with 72
percent in 1960?
•...
Did You Know That ... (cont’d)
• Economists have found that patterns of
marriage have substantial effects on the
distribut...
Income
• Income provides us a means of consuming
and saving
– Can be payment for labor
– Can be payment for other factor
–...
Income (cont'd)
• Distribution of Income
– The way income is allocated among the
population based on groupings of resident...
Income (cont'd)
• The Lorenz Curve
– A geometric representation of the distribution of
income
– A Lorenz curve that is per...
Figure 30-1 The Lorenz Curve

Copyright ©2014 Pearson Education, Inc. All rights reserved.

30-11
Income (cont'd)
• Criticisms of the Lorenz curve
1. It does not include income in kind:
• income received in the form of g...
Income (cont'd)
•

Criticisms of the Lorenz curve (cont’d)
2. It does not account for the differences in size
of household...
Figure 30-2 Lorenz Curves of Income
Distribution, 1929 and 2013

Source: U.S. Department of Commerce.
Copyright ©2014 Pear...
Income (cont’d)
• Income distribution in the United States
– In Table 30-1 on the next slide, we see the
percentage share ...
Table 30-1 Percentage Share of Money Income for
Households Before Direct Taxes

Copyright ©2014 Pearson Education, Inc. Al...
Example: U.S. Residents Move
Among Income Groups Over Time
• Economists Gerald Auten and Geoffrey Gee
have found evidence ...
Income (cont’d)
• The distribution of wealth
– Income—a flow—can be viewed as a return on
wealth—a stock
– The distributio...
Figure 30-3 Measured Total Wealth
Distribution

Source: Board of Governors of the Federal Reserve.
Copyright ©2014 Pearson...
Determinants of Income Differences
• We know there are income differences; that
is not in dispute
• A more important quest...
Determinants of Income
Differences (cont'd)
• We will look at four determinants of income
differences
1. Age
2. Marginal p...
Determinants of Income
Differences (cont'd)
• Age-Earnings Cycle
– The regular earnings profile of an individual
throughou...
Determinants of Income
Differences (cont'd)
• Age-earnings cycle
– At age 18, earnings from wages are relatively
low
– Ear...
Figure 30-4 Typical Age-Earnings
Profile

Copyright ©2014 Pearson Education, Inc. All rights reserved.

30-24
Determinants of Income
Differences (cont'd)
• Marginal productivity
– Talent
– Experience
– Training
– Investment in human...
Determinants of Income
Differences (cont'd)
• Inheritance
– 10% of inequality traced to inheritance

• Discrimination
– Di...
Determinants of Income
Differences (cont'd)
• Access to education
– Minorities have faced discrimination in the
acquisitio...
Theories of Desired
Income Distribution
• The productivity standard
– “To each according to what she or he produces”
• Als...
Poverty and Attempts to Eliminate It
• Throughout history mass poverty has been
accepted as inevitable
• Sustained economi...
Figure 30-5 The Official Poverty Rate in
the United States

Source: U.S. Department of Labor.
Copyright ©2014 Pearson Educ...
Poverty and Attempts to Eliminate It
(cont'd)
• Defining poverty
– Official poverty level in 2011 for an urban family
of f...
Poverty and Attempts to Eliminate It
(cont'd)
• Attacks on poverty: major income
maintenance programs
– Social Security wh...
Poverty and Attempts to Eliminate It
(cont'd)
• Supplemental Security Income (SSI)
– Minimum income for the
• Aged
• Blind...
Poverty and Attempts to Eliminate It
(cont'd)
• Temporary Assistance to Needy Families
(TANF)
– State administered program...
Poverty and Attempts to Eliminate It
(cont'd)
• Food stamps
– Government-issued coupons (or e-debit cards)
that can be use...
Poverty and Attempts to Eliminate It
(cont'd)
• Earned Income Tax Credit Program (EITC)
– Designed to provide rebates to l...
Poverty and Attempts to Eliminate It
(cont'd)
• No apparent reduction in poverty rates
– 1973: 11%
– 1983: 15%
– 1997: 12%...
Health Care
• Health care is intimately related to the
distribution of income and poverty

Copyright ©2014 Pearson Educati...
Health Care (cont'd)
• The U.S. health care situation
– Portion of national income spent on health care
has risen steadily...
Figure 30-6 Percentage of Total National Income
Spent on Health Care in the United States

Sources: U.S. Department of Com...
Health Care (cont'd)
• Question
– Why have health care costs risen so much?

• Answers
– The age-health care expenditure e...
What If . . . The government forced lower
spending on health care by placing legal limits on
prices?

• Legal ceilings on ...
Health Care (cont'd)
• Third Parties
– Parties who are not directly involved in a given
activity or transaction
– Fees may...
Figure 30-7 Third-Party versus Out-ofPocket Health Care Payments

Sources: Health Care Financing Administration; U.S. Depa...
Figure 30-8 The Demand for Health Care
Services

Copyright ©2014 Pearson Education, Inc. All rights reserved.

30-45
Health Care (cont'd)
• Price, quantity demanded, and the question
of moral hazard
– Large percent of medical services paym...
Figure 30-9 Federal Medicare Spending

Sources: Economic Report of the President; U.S. Bureau of Labor Statistics.
Copyrig...
Health Care (cont'd)
• Moral hazard as it affects physicians and
hospitals
– Due to third-party payments, patients do not
...
Health Care (cont'd)
• Medicare expenditures are one of the most
serious problems facing the federal
government today
• Th...
Policy Example: Dual Coverage Drives Up
Federal Health Care Spending
• At present, 61 million elderly and disabled people
...
Health Care (cont'd)
• The nationalization of health care
• In March 2010, President Barack Obama
signed a law that will g...
Table 30-2 Key Components of the Federal
Government’s National Health Care Program

Copyright ©2014 Pearson Education, Inc...
Health Care (cont'd)
• Health Insurance Exchanges
– Government agencies to which the national
health care program assigns ...
Health Care (cont'd)
• Economic effects of the national health care
program include higher health care spending and a
wors...
International Policy Example: In Greece, “Free”
Care Now Includes Substantial Implicit Costs
• Any Greek resident is entit...
Health Care (cont'd)
• Economic effects of the national health care
program (cont’d)
– Impacts on the rest of the U.S. eco...
You Are There: A Portuguese Woman Rethinks
Her Human Capital Investment
• Isabel Fernandes is a 22-year-old Portuguese
wom...
Issues & Applications: Why Is the Female
Income Gap Shrinking?
• As Figure 30-10 on the next slide shows, women
earn lower...
Figure 30-10 The Shrinking Female Income Gap

Sources: U.S. Department of Labor; author’s estimate.
Copyright ©2014 Pearso...
Issues & Applications: Why Is the Female
Income Gap Shrinking? (cont’d)
• For a number of years, more females than males
h...
Summary Discussion
of Learning Objectives
• Using a Lorenz curve to represent a nation’s
income distribution
– The more bo...
Summary Discussion
of Learning Objectives (cont'd)
• Theories of desired income distribution
– Productivity standard
– Ega...
Summary Discussion
of Learning Objectives (cont'd)
• Major reasons for rising health
care costs
– Aging U.S. population
– ...
Summary Discussion
of Learning Objectives (cont'd)
• Key provisions of the new U.S. national
health insurance program
– Al...
Upcoming SlideShare
Loading in...5
×

Chapter 30 Powerpoint

200

Published on

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
200
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Chapter 30 Powerpoint

  1. 1. Chapter 30 Income, Poverty, and Health Care
  2. 2. Introduction Three decades ago, the annual earnings of female workers in the United States averaged about 63 percent of annual earnings for male workers. This ratio has now increased to 83 percent. What role does education play in equalizing earnings between genders? Why do some economists forecast that average earnings for women may eventually surpass average earnings of men? In reading this chapter, you will understand the answers to these questions. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-2
  3. 3. Learning Objectives • Describe how to use a Lorenz curve to represent a nation’s income distribution • Identify the key determinants of income differences across individuals • Discuss theories of desired income distribution Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-3
  4. 4. Learning Objectives (cont'd) • Distinguish among alternative approaches to measuring and addressing poverty • Recognize the major reasons for rising health care costs • Explain the key elements of the new U.S. national health insurance program and evaluate its potential economic effects Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-4
  5. 5. Chapter Outline • • • • • Income Determinants of Income Differences Theories of Desired Income Distribution Poverty and Attempts to Eliminate It Health Care Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-5
  6. 6. Did You Know That ... • Today, only 51 percent of adult U.S. residents are married, as compared with 72 percent in 1960? • Tax laws and government benefits are a contributing factor to the decline in the proportion of married adults. • Also, many people between the ages of 18 and 24 delay marriage in order to obtain a college education. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-6
  7. 7. Did You Know That ... (cont’d) • Economists have found that patterns of marriage have substantial effects on the distribution of income, which is the way that income is allocated among the population. • In this chapter, you will read about factors determining the distribution of income as well as the government’s new health care program. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-7
  8. 8. Income • Income provides us a means of consuming and saving – Can be payment for labor – Can be payment for other factor – Can be from gifts and government transfers Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-8
  9. 9. Income (cont'd) • Distribution of Income – The way income is allocated among the population based on groupings of residents Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-9
  10. 10. Income (cont'd) • The Lorenz Curve – A geometric representation of the distribution of income – A Lorenz curve that is perfectly straight represents complete income equality – The more bowed a Lorenz curve, the more unequally income is distributed Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-10
  11. 11. Figure 30-1 The Lorenz Curve Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-11
  12. 12. Income (cont'd) • Criticisms of the Lorenz curve 1. It does not include income in kind: • income received in the form of goods and services, such as housing or medical care • to be contrasted with money income, which is simply income in dollars, or general purchasing power, that can be used to buy any goods and services Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-12
  13. 13. Income (cont'd) • Criticisms of the Lorenz curve (cont’d) 2. It does not account for the differences in size of households or the number of wage earners households contain 3. It does not account for age differences 4. It ordinarily reflects money income before taxes 5. It does not measure unreported income Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-13
  14. 14. Figure 30-2 Lorenz Curves of Income Distribution, 1929 and 2013 Source: U.S. Department of Commerce. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-14
  15. 15. Income (cont’d) • Income distribution in the United States – In Table 30-1 on the next slide, we see the percentage share of income for households before direct taxes. – The table groups households according to whether they are in the lowest 20 percent of the income distribution, the second lowest 20 percent, and so on. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-15
  16. 16. Table 30-1 Percentage Share of Money Income for Households Before Direct Taxes Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-16
  17. 17. Example: U.S. Residents Move Among Income Groups Over Time • Economists Gerald Auten and Geoffrey Gee have found evidence of considerable income mobility among U.S. residents. – They found that within a given 10-year period, about 57 percent of people initially receiving money incomes placing them in the lowest 20 percent moved into the group with the nexthighest 20 percent of incomes. – Furthermore, the average money incomes of people who began with incomes among the top 20 percent declined within each decade. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-17
  18. 18. Income (cont’d) • The distribution of wealth – Income—a flow—can be viewed as a return on wealth—a stock – The distribution of income is not the same as the distribution of wealth – Wealth includes tangible objects and human wealth Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-18
  19. 19. Figure 30-3 Measured Total Wealth Distribution Source: Board of Governors of the Federal Reserve. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-19
  20. 20. Determinants of Income Differences • We know there are income differences; that is not in dispute • A more important question is why these differences occur • If we know, perhaps we can change policy, or better understand them Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-20
  21. 21. Determinants of Income Differences (cont'd) • We will look at four determinants of income differences 1. Age 2. Marginal productivity 3. Inheritance 4. Discrimination Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-21
  22. 22. Determinants of Income Differences (cont'd) • Age-Earnings Cycle – The regular earnings profile of an individual throughout his or her lifetime Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-22
  23. 23. Determinants of Income Differences (cont'd) • Age-earnings cycle – At age 18, earnings from wages are relatively low – Earnings gradually rise until they peak at about age 50 – Earnings then fall until retirement, when they become zero Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-23
  24. 24. Figure 30-4 Typical Age-Earnings Profile Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-24
  25. 25. Determinants of Income Differences (cont'd) • Marginal productivity – Talent – Experience – Training – Investment in human capital Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-25
  26. 26. Determinants of Income Differences (cont'd) • Inheritance – 10% of inequality traced to inheritance • Discrimination – Different pay for equal MRP – Equal pay for different MRP Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-26
  27. 27. Determinants of Income Differences (cont'd) • Access to education – Minorities have faced discrimination in the acquisition of human capital – The unexplained income differential between whites and blacks is often attributed to discrimination in the labor market. Because no better explanation is offered, we will infer that discrimination in the labor market does indeed still exist Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-27
  28. 28. Theories of Desired Income Distribution • The productivity standard – “To each according to what she or he produces” • Also called the contributive standard, or referred to as the merit standard • Equality—the egalitarian principle – “To each exactly the same” Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-28
  29. 29. Poverty and Attempts to Eliminate It • Throughout history mass poverty has been accepted as inevitable • Sustained economic growth has wiped out mass poverty in many countries • How can there be so much poverty in a nation of such abundance? Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-29
  30. 30. Figure 30-5 The Official Poverty Rate in the United States Source: U.S. Department of Labor. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-30
  31. 31. Poverty and Attempts to Eliminate It (cont'd) • Defining poverty – Official poverty level in 2011 for an urban family of four around $22,000 • Adjusted based on CPI • Does not include cash and non-cash transfer payments • Absolute poverty is not the same as relative poverty – In a relative sense, poverty will always exist even if absolute poverty eliminated Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-31
  32. 32. Poverty and Attempts to Eliminate It (cont'd) • Attacks on poverty: major income maintenance programs – Social Security which has been called OASDI – 90% of all employed persons covered – In 2013, 55 million people received checks averaging $1,000 a month Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-32
  33. 33. Poverty and Attempts to Eliminate It (cont'd) • Supplemental Security Income (SSI) – Minimum income for the • Aged • Blind • Disabled Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-33
  34. 34. Poverty and Attempts to Eliminate It (cont'd) • Temporary Assistance to Needy Families (TANF) – State administered program financed in part by federal grants – The program provides aid to families in need. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-34
  35. 35. Poverty and Attempts to Eliminate It (cont'd) • Food stamps – Government-issued coupons (or e-debit cards) that can be used to purchase food – The supplemental Nutrition Assistance Program (SNAP, commonly known as “food stamps”) provides government-issued, electronic debit cards that can be used to purchase food. • In 2013, almost one in every seven citizens (including children) was receiving SNAP benefits. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-35
  36. 36. Poverty and Attempts to Eliminate It (cont'd) • Earned Income Tax Credit Program (EITC) – Designed to provide rebates to low-income workers – Each year federal government grants more than $46 billion in these credits – Over one-fifth of all tax returns claim an EITC Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-36
  37. 37. Poverty and Attempts to Eliminate It (cont'd) • No apparent reduction in poverty rates – 1973: 11% – 1983: 15% – 1997: 12% – Since then >14% Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-37
  38. 38. Health Care • Health care is intimately related to the distribution of income and poverty Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-38
  39. 39. Health Care (cont'd) • The U.S. health care situation – Portion of national income spent on health care has risen steadily since 1965 • 16% of U.S. real GDP is devoted to spending on health care • Per capita spending greater than anywhere else in the world Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-39
  40. 40. Figure 30-6 Percentage of Total National Income Spent on Health Care in the United States Sources: U.S. Department of Commerce; U.S. Department of Health and Human Services; Deloitte and Touche LLP; VHA, Inc. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-40
  41. 41. Health Care (cont'd) • Question – Why have health care costs risen so much? • Answers – The age-health care expenditure equation – New technologies – Third-party financing Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-41
  42. 42. What If . . . The government forced lower spending on health care by placing legal limits on prices? • Legal ceilings on prices of health care services would reduce the quantities of services offered by physicians and hospitals, and this would in turn reduce overall health care expenditures. • However, this would also diminish the availability of medical treatment for illness and injury. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-42
  43. 43. Health Care (cont'd) • Third Parties – Parties who are not directly involved in a given activity or transaction – Fees may be paid by third parties (insurance companies, government) Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-43
  44. 44. Figure 30-7 Third-Party versus Out-ofPocket Health Care Payments Sources: Health Care Financing Administration; U.S. Department of Health and Human Services. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-44
  45. 45. Figure 30-8 The Demand for Health Care Services Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-45
  46. 46. Health Care (cont'd) • Price, quantity demanded, and the question of moral hazard – Large percent of medical services payments made by third parties – Price to the consumer drops and the quantity demanded increases – An individual with a zero deductible may engage in a less healthful lifestyle Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-46
  47. 47. Figure 30-9 Federal Medicare Spending Sources: Economic Report of the President; U.S. Bureau of Labor Statistics. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-47
  48. 48. Health Care (cont'd) • Moral hazard as it affects physicians and hospitals – Due to third-party payments, patients do not have to worry about the cost of operations and medical procedures – Physicians and hospitals order more of them since they are reimbursed on the basis of medical procedures Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-48
  49. 49. Health Care (cont'd) • Medicare expenditures are one of the most serious problems facing the federal government today • The number of beneficiaries has increased from 19.1 million in 1966 to more than 40 million in 2011 • Federal spending on Medicare has increased about 10% a year, adjusted for inflation Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-49
  50. 50. Policy Example: Dual Coverage Drives Up Federal Health Care Spending • At present, 61 million elderly and disabled people are enrolled in Medicare and 65 million low-income citizens are covered by Medicaid. • Both groups of people include about 10 million individuals who qualify for “dual coverage,” meaning that their health care expenses are covered by both federal programs simultaneously. • Poor administrative coordination between Medicare and Medicaid gives a health care provider the incentive to bill the one program that pays the higher reimbursement rate. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-50
  51. 51. Health Care (cont'd) • The nationalization of health care • In March 2010, President Barack Obama signed a law that will govern the future operation of U.S. health care markets • As shown in Table 30-2, the key features: – – – – Government health insurance mandates Government health care subsidies Government health insurance exchanges Regulations and taxes Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-51
  52. 52. Table 30-2 Key Components of the Federal Government’s National Health Care Program Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-52
  53. 53. Health Care (cont'd) • Health Insurance Exchanges – Government agencies to which the national health care program assigns the task of assisting individuals, families, and small businesses in identifying health insurance policies to purchase Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-53
  54. 54. Health Care (cont'd) • Economic effects of the national health care program include higher health care spending and a worsened moral hazard problem – Because the price people actually pay out-of-pocket will decline, the quantity of health care services demanded will increase – Because health insurers will be required to cover an expanded quantity of services, total expenditures on health care will increase – Because people will pay a smaller portion of the actual cost of treating health problems, more individuals will have reduced incentives to make decisions that promote better health Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-54
  55. 55. International Policy Example: In Greece, “Free” Care Now Includes Substantial Implicit Costs • Any Greek resident is entitled to health care provided by a plan called IKA National Insurance. • Greek hospitals are financed by the nation’s government, which recently has been unable to borrowing sufficient operating funds. • As a consequence, hospitals are often unable to provide medications for patients. • This has caused some patients to leave their hospital rooms in order to obtain needed medications from a private pharmacy through their IKA insurance benefits. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-55
  56. 56. Health Care (cont'd) • Economic effects of the national health care program (cont’d) – Impacts on the rest of the U.S. economy – Labor market: The effective wage rate will increase as firms are required to provide health insurance – Market for goods and services: The increase in labor costs that firms incur will raise their marginal costs and thus their output prices – Government budgets: The federal government ultimately will have to search for ways to reduce its health care expenditures and to raise more tax revenues to fund the program Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-56
  57. 57. You Are There: A Portuguese Woman Rethinks Her Human Capital Investment • Isabel Fernandes is a 22-year-old Portuguese woman who stopped attending school after the eighth grade. Her limited education also limits her prospects of finding a job. • To improve her employment prospects, Fernandes has become a part time student at a private, nonprofit school. • Friends have told her a high school degree might give her sufficient background to wait tables at restaurants. For the time being, however, she hopes to find work as a cleaning woman. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-57
  58. 58. Issues & Applications: Why Is the Female Income Gap Shrinking? • As Figure 30-10 on the next slide shows, women earn lower average incomes than men. It also reveals, however, that the gap between the average female income and the average male income has dropped from 37 percent in 1980 to about 18 percent today. • What accounts for the shrinkage of the female income gap? • Most economists agree that the key explanation is a substantial increase in female investment in human capital. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-58
  59. 59. Figure 30-10 The Shrinking Female Income Gap Sources: U.S. Department of Labor; author’s estimate. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-59
  60. 60. Issues & Applications: Why Is the Female Income Gap Shrinking? (cont’d) • For a number of years, more females than males have graduated from U.S. high schools. • Women currently are earning 57 percent of the degrees issued each year by U.S. colleges and universities. • Furthermore, 100,000 more women than men have obtained master’s and doctoral degrees each year since 2010. Thus, women are now better trained for many high-income jobs. Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-60
  61. 61. Summary Discussion of Learning Objectives • Using a Lorenz curve to represent a nation’s income distribution – The more bowed a Lorenz curve, the more unequally income is distributed • Key determinants of income differences across individuals – Age – Marginal productivity differences – Discrimination Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-61
  62. 62. Summary Discussion of Learning Objectives (cont'd) • Theories of desired income distribution – Productivity standard – Egalitarian principle • Alternative approaches to measuring and addressing poverty – Absolute poverty standard – Relative poverty standard Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-62
  63. 63. Summary Discussion of Learning Objectives (cont'd) • Major reasons for rising health care costs – Aging U.S. population – Higher priced medical technologies – Third-party financing of health care expenditures – Moral hazard Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-63
  64. 64. Summary Discussion of Learning Objectives (cont'd) • Key provisions of the new U.S. national health insurance program – All individuals are required to purchase health insurance – Firms with more than 50 employees must provide health insurance or pay penalties – More low-income families will be placed in the Medicaid program Copyright ©2014 Pearson Education, Inc. All rights reserved. 30-64
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×