Inequality and Poverty When Effort Matters

Inequality and Poverty When Effort Matters

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On the presumption that poorer HOOK people tend to work less, it is often claimed that standard measures of inequality and poverty are overestimates.The paper points to a number of reasons to question this claim.It is shown that, while the labor supplies of American adults have a positive income gradient, the heterogeneity in labor supplies generates considerable horizontal inequality.Using equivalent incomes to adjust for effort can reveal either higher or lower inequality depending AC Drive Motor on the measurement assumptions.With only a modest allowance for leisure as a basic need, the effort-adjusted poverty rate in terms of equivalent incomes rises.