Labor Economics
7th Edition
ISBN: 9780078021886
Author: George J Borjas
Publisher: McGraw-Hill Education
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Question
Chapter 7, Problem 7P
To determine
Calculate the income inequality of different countries.
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World Bank data show that in 1995, the poorest 20% of households accounted for 7.5% of household income in Niger, the next 20% of households accounted for 11.8% of income, the middle 20% accounted for 15.5% of income, the second richest 20% accounted for 21.1% of income, and the top 20% accounted for 44.1% of income.
What was the cumulative income share of the bottom 60% of households in Niger?
2. Draw a Lorenz curve and calculate the Gini coefficient for Niger.
Q.1 In the table below, you are given data on income distribution within the UK for the year 2012-2013.
Population clumped together
based income ($)
Percentage share of total
income ($)
Percentage share of disposable
income (after taxes and
transfers) ($)
Bottom most quintile
Second quintile
Middle quintile
Fourth quintile
Top most quintile
3
8
14
15
17
25
22
49
38
a) Using the information given in the table above and choosing the appropriate diagram, you are
required to plot two Lorenz curves that will show the distribution of income before and after
intervention by the government in the form of taxes and benefits. Label them as LC1 and LC2
respectively.
b) Now calculate the Gini coefficients for both cases and comment on the nature of intervention
(or type of tax system) by the government.
GDP per capita is an indicator that tells us the whole picture about income inequality and income distribution.
Group of answer choices
True
False
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- Q.1 In the table below, you are given data on income distribution within the UK for the year 2012-2013. Population clumped together based income ($) Percentage share of total income ($) Percentage share of disposable income (after taxes and transfers) ($) Bottom most quintile Second quintile Middle quintile Fourth quintile 3 9. 8 14 15 17 25 22 Top most quintile 49 38 a) Using the information given in the table above and choosing the appropriate diagram, you are required to plot two Lorenz curves that will show the distribution of income before and after intervention by the government in the form of taxes and benefits. Label them as LC1 and LC2 respectively.arrow_forwardIf a teacher is teaching his/her child at home will this be counted while estimating national income of a nation?arrow_forwardBriefly describe any four census-related deficiencies as sources of geographical data.arrow_forward
- The table shows the distribution of personal income in the United States in 2016. Percentage of total income Households Poorest 20 percent 3.1 Second 20 percent Third 20 percent Fourth 20 percent Richest 20 percent 8.2 14.3 23.2 51.2 For all U.S. households to receive an equal share of income, what percentage of total income would the poorest 20 percent of households have to receive from higher-income groups? What percentage would the second poorest have to receive? >>> Answer to 1 decimal place. The poorest 20 percent of households would have to receive percent. The second poorest 20 percent of households have to receive percent.arrow_forwardUsing the following data, you calculated National Income in an early question. Wages and Salaries Employers' contributions to Social Security and employee benefit plans Monetary value of fringe benefits Income earned by self-employed individuals Income earned by unincorporated businesses Stockholder dividends Retained earnings $150,000 $75,000 $37,000 $216,000 $104,000 $46,500 $36,500 $15,000 $20,000 $1,940 $1,005 Income from the use of a house Income from the use an office space Interest received by households Interest paid by households Using that national income, use the following data to calculate GDP. Use the following format $100,000 Income earned from the rest of the world $200,000 $125,000 $2,000 $10,000 $500 Income earned by the rest of the world Indirect business taxes Capital consumption allowance Statistical discrepancyarrow_forwardWhat is the following formula that could be used for calculating the per capita income of a country??arrow_forward
- The European Union has heavily protected its farm sector through import duties. Also, the Union subsidizes its exports of agricultural products. If “cropland†is regarded as a factor of production and is included in the Leontief statistic (along with labor), how would the presence of these agricultural policies affect the results of such tests?arrow_forwardCanadians living and working outside Canda must report their income for the purpose of calculating: Nominal GDP real GDP Gross National Product GDP per capita Potential GDParrow_forwardUsing the following information provided in the table below, calculate the Gini-coefficient for Algura. Population 10 32 15 Income per month per person 2000 96000 1500 Total Population 57 57 57arrow_forward
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