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Earnings Capacity, Poverty, and Inequality - 1st Edition - ISBN: 9780122758508, 9781483260525

Earnings Capacity, Poverty, and Inequality

1st Edition

Authors: Irwin Garfinkel Robert H. Haveman
eBook ISBN: 9781483260525
Imprint: Academic Press
Published Date: 1st January 1977
Page Count: 128
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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



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



No. of pages:
© Academic Press 1977
1st January 1977
Academic Press
eBook ISBN:

About the Authors

Irwin Garfinkel

Robert H. Haveman

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