Distribution of income Poverty Poverty rates in U.S. in 2001 might be considered surprisingly high.7% for population as whole Concentrated among certain groups, such as female headed households. children and minorities Elderly have lower poverty rates than the U.s average
11 Distribution of Income: Poverty • Poverty rates in U.S. in 2001 might be considered surprisingly high – 11.7% for population as whole. • Concentrated among certain groups, such as female headed households, children, and minorities. • Elderly have lower poverty rates than the U.S. average
Distribution of income Poverty Can also look at trends over time · See Table7.3 Poverty considerably lower than in 1960S but not much progress since 1970 12
12 Distribution of Income: Poverty • Can also look at trends over time. • See Table 7.3 • Poverty considerably lower than in 1960’s, but not much progress since 1970
Table 7 3 Table 7.3 poverty rate (selected vears Year Poverty rate Year Poverty Rate 1959 22.4% 1980 13.0% 1960 22.2 1985 14.0 1965 17.3 1990 13.5 1970 12.6 1995 13.8 1975 12.3 2000 11.3 2001 11.7 SourCe:UsBureauoftheCensushistoRicalpoVertyTablesWwwDocumentUrl:http://www.census.gov/ hhes/poverty/histpov/perindex. htmL
Table 7.3
Interpretation Problems Poverty line( poverty rate) is subject to a number of criticisms When interpreting the numbers, it is useful to know the conventions and limitations 14
14 Interpretation Problems • Poverty line (& poverty rate) is subject to a number of criticisms. • When interpreting the numbers, it is useful to know the conventions and limitations
Interpretation Problem #1 Income consists only of cash receipts Excludes in-kind transfers like health insurance, food stamps, and housing Would reduce poverty rate by more than 20% Excludes non-market work such as childcare or housework Ignores income flow from durable goods 15
15 Interpretation Problem #1 • “Income” consists only of cash receipts. – Excludes in-kind transfers like health insurance, food stamps, and housing. • Would reduce poverty rate by more than 20%. – Excludes non-market work such as childcare or housework. – Ignores income flow from durable goods