Earnings Capacity, Poverty, and Inequality

Earnings Capacity, Poverty, and Inequality

1st Edition - January 1, 1977

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  • Authors: Irwin Garfinkel, Robert H. Haveman
  • eBook ISBN: 9781483260525

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Earnings Capacity, Poverty, and Inequality describes the development and application of a way to measure economic status that will avoid some mistakes occurring in methods of measurement. The book reviews the concept of earnings capacity through different measures of economic status. The authors discuss the procedures used in estimating family revenue, sources of data, and inherent weaknesses in such measures. They consider the degree to which different groups classified by age, sex, race, or economic status use their earnings capacity. The authors compare income utilization of those who are considered poor using both measures of earning capacity and current income. Then, a common government and academic policy known as the target efficient — the proportion of total benefits allocated to poor families — is discussed. The authors cite two important factors: 1) estimates of target efficiency are affected by how poverty is defined and 2) target efficiency of transfer programs changes when the economic status method is used instead of the income method. The authors also examine the effects of labor market discrimination on the earning differences between two races. The text will prove useful for sociologists, psychologists, economists, and students of political science and population demographics.

Table of Contents

  • Foreword


    1 Measuring Economic Status: The Concept of Earnings Capacity

    Alternative Measures of Economic Status

    The Present Study

    2 The Measurement of Earnings Capacity

    Data and Methodology

    Weaknesses in the Measure of Earnings Capacity

    3 Economic Inequality and the Utilization of Earnings Capacity

    Aggregate Capacity Utilization and Its Components

    Patterns of Capacity Utilization within the Nonaged Population

    Earnings Capacity and Economic Inequality


    4 Earnings Capacity and Poverty

    The Earnings Capacity Poor and the Current Income Poor

    Determinants of Poverty Status Based on Earnings Capacity and Current Income

    The Probability of Poverty Status for Various Family Types


    5 Earnings Capacity and the Target Efficiency of Income Transfer Policies

    6 Labor Market Discrimination and Black-White Differences in Economic Status

    Racial Differences in Economic Status

    The Role of Labor Market Discrimination

    Conceptual Framework and Empirical Problems

    Empirical Procedure and Assumptions

    Measuring the Effect of Labor Market Discrimination

    Estimates of Labor Market Discrimination

    Reliability of the Methodology

    Labor Market Discrimination and the Distribution of Earnings Capacity

    Labor Market Discrimination and Inequality


    7 Earnings Capacity and Economic Status: Summary

    A Summary and Some Policy Implications

    A Look Back and a Look Ahead

    Appendix A Estimating Lorenz Curves and Gini Coefficients

    Appendix B Effect of Randomization on Estimates of Earnings Capacity

    Appendix C Composition of the Earnings Capacity and Current Income Poor in the Nonaged Population

    Appendix D Earnings Functions from Michigan Income Dynamics Panel Study Data

    Appendix E Upper and Lower Bound Measures of the Role of Labor Market Discrimination


Product details

  • No. of pages: 128
  • Language: English
  • Copyright: © Academic Press 1977
  • Published: January 1, 1977
  • Imprint: Academic Press
  • eBook ISBN: 9781483260525

About the Authors

Irwin Garfinkel

Robert H. Haveman

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