4.2 - Poverty and inequality Flashcards
Absolute poverty
4.2.1 - Absolute and relative poverty
Those people who do not have adequate nutritional intake per day, or do not have adequate shelter or clothing in order to survive. The World Bank reports the number of people in countries below a $2.15 a day adjusted for purchasing power parity (PPP)
Deprivation
4.2.1 - Absolute and relative poverty
Deprivation takes into account whether people access to things essential for a basic standard of living. These include clean drinking water, electricity, clean fuel for cooking, education, toilet facilites, basic transport and communication, basic income and wealth (measured by whether a household belongs to the poorest 20%)
Earnings
4.2.1 - Absolute and relative poverty
Earnings are made up of wages plus overtime pay, bonuses and comission
Economic rent
4.2.1 - Absolute and relative poverty
Any amount earned by a factor of production, such as labour, above the minimum amount they require to work in a current occupation
Economically inactive population
4.2.1 - Absolute and relative poverty
Those who are of working age but are neither in work nor actively seeking paid work
Effective marginal tax rate
4.2.1 - Absolute and relative poverty
The effective marginal tax rate is the tax rate on each extra £1 of income - it takes into account the impact of direct taxes (such as income tax) but also the possible withdrawal of means-tested welfare benefits if people take a paid job. A high effective marginal tax rate is a root cause of the unemployment trap, it creates disincentives to find work
Efficiency wage
4.2.1 - Absolute and relative poverty
A theory that suggests it may benefit firms to pay workers a wage higher than thier marginal revenue product. Paying a higher wage improves worker morale and can lead to a high quality of people applying for new jobs as they become available
Extreme poverty line
4.2.1 - Absolute and relative poverty
Revised in 2015, the World Bank now measures the scale of extreme poverty as the percentage of a country’s population living on less than $2.15 a day ajusted for purchasing power parity
Poverty
4.2.1 - Absolute and relative poverty
There is no single definition of poverty. Poverty has several aspects including:
* Material conditions: needing goods and services, multiple devprivation, or a low standard of living
* Economic position: low income, inequality or low social class
* Social position of the poor, through lack of entitlement, dependency or social exclusion
Poverty Line
4.2.1 - Absolute and relative poverty
An income level that is considered minimally sufficient to sustain a family in terms of food, housing, clothing, medical needs, and so on
Poverty trap
4.2.1 - Absolute and relative poverty
A situation in which there is little incentive for workers in low-paid jobs to earn extra income, because it wouldl result in having to either pay higher direct tax and/or losing some of their welfare benefit payments
Relative povety
4.2.1 - Absolute and relative poverty
The relative position of some economic unit (e.g. individual, household, racial group) compared to another economic unit. A person can be relatively poor but not absolutely poor - is really yo do with distribution of income in a country
Transfer earnings
4.2.1 - Absolute and relative poverty
The minimum reward required to keep factors of production, such as labour, in its current occuaption
Unemployment trap
4.2.1 - Absolute and relative poverty
A situation in which there is little financial incentive for somone who is unemployed to start working because the combined loss of welfare benfits and need to pay off income tax and other direct taxes might result in them being worse off
Wealth
4.2.1 - Absolute and relative poverty
The value of assets owned by a household. Assets can include property, shares and savings and marketable wealth such as antiques and other rare items
