Bundle: ECON MICRO, 5th + Aplia, 1 term Printed Access Card
Bundle: ECON MICRO, 5th + Aplia, 1 term Printed Access Card
5th Edition
ISBN: 9781337192712
Author: William A. McEachern
Publisher: Cengage Learning
Question
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Chapter 18, Problem 1.1P
To determine

The shift in income distribution in U.S. in the last two decades by using the graph provided

Concept Introduction:

Quintile • There are five equal groups.

Income inequality • It refers to the unequal distribution of income earned by households of the country dividing the populace into the rich and the poor.

Expert Solution & Answer
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Explanation of Solution

From 1980s and the subsequent period, income is more concentrated among the top fifth of the population. At the same time, the income share of the bottom fifth has declined. The former increased from 43.7% in 1980s to 51% in the year 2013. In all quartile till the fourth one, the income share has decreased from 1980s to 2013. In second quintile, it has decreased from 10.3% to 8.3%, in the third from 16.9% to 14.4%, and in fourth from 24.9% to 23%.

The reasons for this inequality are analyzed from time to time in the United States. The major and indisputable reasons include globalization, income differences because of different level of educational qualification, race disparities etc.

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