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Microeconomics
Lecture 20
Freedom
Questions?
Median Income
of Women
= 78%Median Income
of Men
Claudia
Goldin
Professor of
Economics
Gender Wage
Gap
Is there a Gender
Wage Gap?
Yes, because there is
a choice gap
Age
Income
Age
Education
Income
Education
Experience
Income
Experience
Riskiness
Income
Riskiness
Years of Marriage
Income
Marriage
Gender Wage Gap?
In markets with little
competition
Income Distribution
divide into 5 groups
20%
quintiles
Lowest
Fifth
Second
Fifth
Middle
Fifth
Fourth
Fifth
Highest
Fifth
Average Income $12,942 $34,504 $59,149 $95,178 $213,941
Average
Number of
Earners Per
Household
0.43 0.93 1.36 1.76 2.04
Income Per
Earner $30,098 $37,101 $43,492 $54,078 $104,873
Worked Full
Time 18% 47% 60% 72% 78%
Married 17% 35% 48% 63% 77%
Bachelor’s
Degree or More 15% 21% 31% 43% 64%
U.S. Households
Income Mobility
moving between
quintiles
Income Mobility
0%
20%
40%
60%
80%
Top 1% - TenYrs Top 1% Top 5% Top 10% Top 20%
73%
56%
39%
12%
0.6%
Income Categories
don’t change
People in the
categories do
Environmental
Economics
Common
Resource
Drink as fast
as possible
before it
runs out
Private Good
Each person has his own cup
Which method will
incentivize people
to not waste the resource?
Share one cup
Each person gets
their own cup
Tragedy of the Commons
If everyone owns it,
no one owns it
Privatize the commons
Environmental
Problems
Lack of clear
Property Rights
Property Rights
Reduce contention
Create wealth
Environmental
Economics
Personalize Benefits
Socialize Costs
Externalities
Negative
Positive

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