How has the inequality of income changed in the U.S. economy since the late 1970 s?

Name: Problem 25, Chapter 15: Principles of Microeconomics
Uploaded: 2021-03-06T04:33:03-08:00
Duration: 4 min 57 s
Channel: Noor Almesad
Description: How has the inequality of income changed in the U.S. economy since the late 1970 s?

How has the inequality of income changed in the U.S. economy...

Key Concepts

Historical Trends in Economic Inequality

Historical trends in economic inequality examine how the distribution of income has evolved over time. This analysis helps in understanding long-term structural changes in the economy, the effects of policies and technological advancements, and shifts in labor markets. Studying these trends is crucial for identifying periods of rising or falling inequality and for making informed policy recommendations.

Income Inequality

Income inequality refers to the extent to which income is distributed unevenly among a population. It is a core concept in economics and social studies, serving as an indicator of economic disparity and social stratification. This concept helps in understanding how resources are allocated among different segments of the population and the potential impacts on social mobility and economic policies.

Economic Measurement of Inequality

Economic measurement of inequality involves a variety of metrics and indices that quantify disparities in income distribution, such as the Gini coefficient, income percentiles, and decile ratios. These measures provide a statistical basis for assessing how evenly income is distributed, facilitating comparisons over time or between different regions or demographic groups.

U.S. Economic Environment

The U.S. economic environment encompasses the broader economic, political, and social factors that influence income distribution. This includes aspects such as labor market dynamics, fiscal and monetary policies, globalization, and technological changes. Analyzing this environment provides context for changes in income inequality, helping to explain how different economic forces and policy decisions impact the distribution of income over time.

Transcript

00:06 Let's talk about income inequality in the us and specifically since the 19 seventies.

00:19 We say the 19 seventies that we're interested in because it was relatively stable before then.

00:28 So now we want to discuss the income inequality and how it's changed.

00:32 First, we might be interested in how we can calculate it.

00:35 So how do we calculate income inequality? we do this through quintiles of earnings, which is basically splitting into fits the democrat in a minute.

00:47 And we can also depict this and a lawrence curve.

00:54 So let's start with quintiles.

00:56 How would we, um, look at income equality through this, which is how we typically would measure it.

01:10 So basically, if we just take everybody in the country and look at their income and then we would order them and group them by their level of income from lowest two highest.

01:31 And because we are doing it in quintiles, we are splitting them in five groups, just like portals.

01:39 You will be splitting in fourths, for example, and you can do it in different ways.

01:44 So we're ordering everybody from lowest earners to highest earners, and we can tell how equal the distribution is.

01:52 Um is most of the income going to the highest earners is equal is proportional to the lowest earners.

01:57 And we want to see is there a big difference? and to the highest earners and the lowest earners to tell us if there is inequality...

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