lecture 4

Question 1

lifetime income inequality

Answer 1

-redistribute between the same person over the lifetime- take away money from people in their middle age and give it to younger
-income inequality because of their age and where they are in their carrier

Question 2

what types of inequality people care about

Answer 2

-lifetime inequality
-opportunity inequality ( when you don’t have the option to have differences in the preferences, circumstances you are born into )
-earn less because of their characteristics: gender, ethnicity

Question 3

simplifies life cycle model

Answer 3

-income flow goes up and flat and then dack down
-consumprion/average erning= it stays flat- assumption that rational and informed you will want to smooth the consumption all the time, if you consume more you can shift income to a period of less
-better picture/measure of lifetime inequality= IF THEY LOOK AT THE INEQ IN CONSUMPTION