Poverty and Inequality Flashcards
1
Q
How is the poverty rate calculated?
A
% of the population below the poverty line in any given year
2
Q
What is the poverty line, who originally invented it, and how was it calculated?
A
The poverty line is the income needed for a basic standard of living.
It was originally founded in 1963 by Mollie Orshansky.
Originally calculated by determining the amount needed to buy a nutritionally adequate diet multiplied by 3
3
Q
What is the poverty trap?
A
Antipoverty programs designed to reduce assistance by the same amount of income earned, resulting in less desire to work since net income remains the same.
4
Q
How can the effect of the poverty trap be reduced?
A
By reducing the government assistance per $1 earned will incentivize people to work more so they can earn more
