The Distribution Of Income And Wealth: Poverty And Inequality Flashcards
What is absolute poverty?
When a person doesn’t have enough income to fulfil basic needs
What is distribution of income and wealth?
The way in which total income and wealth are divided among the population of the economy
What is an earnings trap?
Situations where the more an individual earns, the less they are entitled to making it hard to escape poverty
What is equity?
Fairness, justness. Involves value judgments
What is fiscal drag?
As wages rise, a higher proportion of income is paid in tax
What is the Gini coefficient?
Measures income or wealth inequality; maximum inequality is 1
What is horizontal equity?
People in identical circumstances are treated equally
What is hysteresis?
Effects that persist even after the initial causes giving rise to the effects are removed
What is inequality?
Unfairness, unjustness. Involves value judgements
What is Kuznets hypothesis?
Theory that as an economy grows, inequality is initially increased then decreased
What is Lorenz curve?
Can be used to illustrate and measure distributive inequalities
What is means tested benefits?
Entitlement to certain benefits depends on wether the income or wealth of an individual is below a certain level
What is a poverty trap?
Where rise in income leads to a decrease in eligibility in benefits, forcing individuals deeper into poverty
What is vertical equity?
People in different circumstances are treated unequally but fairly
