Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed.
PART 6 The Economics of Labor Markets
Chapter 20 of 36 Income Inequality and Poverty
Section 1 of 21
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Measurement of Inequality
U. S. Income Inequality
Inequality Around the World
The Poverty Rate
Problems in Measuring Inequality
Alternative Measures of Inequality
Economic Mobility
What to Make of Rising Inequality
The Political Philosophy of Redistributing Income
Utilitarianism
Liberalism
Libertarianism
Policies to Reduce Poverty
Minimum Wage Laws
Welfare
Negative Income Tax
In-Kind Transfers
Child Labor
Antipoverty Programs and Work Incentives
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Short summary of Gregory Mankiw, Principles of Economics, 5th Ed., Chapter 20: Income Inequality and Poverty
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This chapter explores how income is distributed, why inequality arises, and how governments respond through policy.
It explains income differences stem mainly from productivity, education, technology, and globalization, which increase rewards for skilled labor.
The U.S. has seen rising inequality since the 1970s, with higher earnings concentrated among educated and high-skilled workers.
Poverty is measured by income relative to the official poverty line, which defines the minimum needed for basic living.
Many people experience poverty temporarily, though a smaller group remains persistently poor due to low skills, health issues, discrimination, or family instability.
Mankiw presents key policy tools—minimum wages, welfare programs, the Earned Income Tax Credit (EITC), and public education—each balancing equity and efficiency.
Redistribution can reduce hardship but risks weakening incentives to work or invest - “leaky bucket” problem.
He concludes that effective policy seeks to alleviate poverty while preserving economic incentives, ensuring a balance between fairness and productivity.
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income inequality and poverty
shotoku kakushi to hinkon
所得格差と貧困
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