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| Preface | |
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| Introduction: issues and scope of book | |
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| Recent trends in living standards | |
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| Income and earnings stagnate while poverty remains unchanged | |
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| Inequality rises sharply | |
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| Middle class debt explodes | |
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| What has happened to tax rates? | |
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| Rising profits is the key | |
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| Yet schooling has continued to rise | |
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| Some conclusions | |
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| Causes of rising inequality | |
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| Skill-biased technology change | |
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| The shift to services | |
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| Declining unionization | |
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| Globalization | |
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| Downsizing and outsourcing | |
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| Public policy changes | |
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| Plan of the textbook | |
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| Part I.Inequality, poverty, and mobility: measurement and trends | |
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| Income, earnings, and the standard of living | |
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| Introduction | |
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| The composition of personal income in the United States | |
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| Measuring the standard of living | |
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| Real versus nominal | |
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| Real versus nominal | |
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| Trends in living standards in the U.S | |
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| Factor shares | |
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| Historical studies on factor shares* | |
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| International comparisons of living standards | |
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| Per Capita income | |
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| The Human Development Index | |
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| Household production and well-being* | |
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| Defining household work | |
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| The market cost approach | |
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| The opportunity cost approach | |
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| Empirical work on household production | |
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| Summary | |
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| References, bibliography, and data sources | |
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| Discussion questions and problem set | |
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| An introduction to the national income and product accounts* | |
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| The relation to the national accounts | |
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| The sources of personal income | |
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| The derivation of factor shares | |
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| Miscellaneous issues in national accounting | |
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| Treatment of international trade | |
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| National income at factor costs | |
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| The treatment of capital gains | |
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| Income inequality: Its measurement, historical trends, and international comparisons | |
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| Introduction | |
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| Review of basic statistics | |
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| Mean, variance and standard deviation | |
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| Distributions | |
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| Percentile ranking | |
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| Inequality measures | |
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| Concentration measures | |
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| Coefficient of variation | |
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| The Lorenz curve | |
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| Gini coefficient | |
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| Log variance of income* | |
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| The Theil entropy index* | |
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| Atkinson's measure* | |
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| Lorenz dominance* | |
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| Time trends in income inequality in the United States | |
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| International comparisons of inequality | |
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| Inequality comparisons among high-income countries | |
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| The Kuznets curve | |
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| The world distribution of income* | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions and Problem Set | |
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| Poverty: Definitions and historical trends | |
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| Introduction | |
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| The measurement of poverty | |
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| The official U.S. poverty standard | |
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| Absolute versus relative poverty thresholds | |
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| Subjective poverty lines | |
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| Formal derivation of the Leyden poverty line* | |
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| Other concepts of poverty | |
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| Measurement of poverty incidence | |
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| The poverty rate and the poverty gap ratio | |
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| Composite measures of poverty | |
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| Poverty trends in the U.S | |
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| Composition of the poor | |
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| Other dimensions of poverty | |
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| Poverty spells and the permanence of poverty | |
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| The underclass | |
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| International comparisons of poverty rates | |
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| Other Issues in the measurement of poverty | |
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| Equivalence scales | |
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| Choice of a price index | |
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| The treatment of taxes | |
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| The treatment of non-cash government benefits | |
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| The role of household wealth | |
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| Consumption-based measures of poverty | |
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| Choice of the accounting period | |
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| Other issues | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions and problem set | |
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| Household wealth | |
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| Introduction | |
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| What is household wealth? | |
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| Wealth and well-being | |
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| Marketable wealth | |
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| Other definitions of household wealth | |
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| Historical time-series data on household wealth and its composition | |
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| Trends in average wealth | |
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| Changes in wealth composition | |
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| Homeownership rates | |
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| Wealth inequality in the United States | |
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| Methods used to estimate wealth inequality | |
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| Estate tax data | |
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| Household survey data | |
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| Income capitalization techniques | |
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| Wealth tax data | |
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| Long-term trends in household wealth inequality in the U.S | |
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| Comparisons with income inequality | |
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| Movements in stock and housing prices | |
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| Changes in wealth inequality, 1962-2004 | |
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| Changes in average wealth holdings | |
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| Trends in wealth inequality | |
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| Portfolio composition by wealth and age class | |
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| Relation between income and wealth | |
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| The Forbes 400 | |
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| International comparisons of household wealth distribution | |
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| Comparisons of long-term time trends | |
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| Comparisons of recent trends | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions and problem set | |
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| Economic Mobility | |
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| Introduction | |
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| Mobility measures | |
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| Measuring intergenerational mobility | |
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| The Shorrocks measure and other measures of lifetime mobility | |
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| Standard measures | |
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| More advanced mobility indices* | |
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| Mobility over time | |
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| Income mobility | |
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| Earnings mobility | |
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| Other dimensions of mobility | |
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| Intergenerational mobility | |
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| Results for the United States | |
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| Mechanisms of transmission | |
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| International comparisons | |
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| Wealth mobility | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions | |
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| Explanations of inequality and poverty | |
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| The labor force, employment, and unemployment | |
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| Introduction | |
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| Basic concepts of the labor force, employment, and unemployment | |
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| Employment | |
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| Unemployment | |
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| The labor force | |
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| Estimating employment statistics | |
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| Labor force participation rates (LFPR | |
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| LFPR by gender, race, and age | |
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| Two-earner households | |
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| Educational attainment of the labor force | |
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| The industrial and occupational composition of employment | |
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| Measures of unemployment and historical trends | |
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| The incidence of unemployment | |
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| Jobless rates by demographic characteristic | |
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| Unemployment by industry, occupation, and region | |
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| Types of unemployment | |
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| Frictional unemployment | |
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| Seasonal unemployment | |
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| Structural unemployment | |
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| Deficient demand (Keynesian) unemployment | |
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| The debate over the causes of unemployment | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions | |
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| The role of education and skills | |
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| Introduction | |
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| The human capital model | |
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| The rate of return to human capital | |
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| The internal rate of return | |
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| On-the-job training | |
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| Additional implications of the human capital model | |
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| Basic assumptions of the model | |
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| A theory of relative earnings | |
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| Policy implications | |
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| The formation of an equilibrium in the human capital model* | |
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| Earnings, schooling and experience | |
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| Rates of return to schooling | |
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| Policy implications | |
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| Lifetime earnings | |
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| The Schooling-earnings function* | |
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| The extended earnings function* | |
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| Ability and earnings | |
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| Estimates of the ability effect* | |
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| The nature vs. nurture controversy | |
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| Productivity and earnings | |
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| Experience, productivity, and earnings | |
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| Other interpretations of the relation between schooling and earnings | |
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| Education as a screening device | |
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| Family background | |
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| Schooling as a socializing mechanism | |
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| Earnings inequality and human capital* | |
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| Summary and concluding remarks | |
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| References and bibliography | |
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| Discussion questions and problem set | |
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| Unions, dual labor markets and structural models of earnings | |
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| Introduction | |
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| The role of labor unions | |
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| A brief history of trade unionism in the U.S | |
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| The formation of the American Federation of Labor (AFL | |
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| The Great Depression and its aftermath | |
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| Trends in union membership | |
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| The decline in trade unionism | |
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| The economic role of labor unions | |
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| Union organization | |
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| Collective bargaining | |
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| Strikes and other union weapons | |
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| Labor market impact of trade unions | |
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| Marshall's rules* | |
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| The effect of unions on wages: the evidence | |
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| The "threat effect" | |
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| Inequality of earnings | |
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| Segmented labor markets | |
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| Internal labor markets | |
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| The structure of internal labor markets | |
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| Rationale for internal labor markets | |
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| The dual labor market model | |
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| Rationale for a secondary labor market | |
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| The make-up and consequences of the secondary labor market | |
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| Extensions of the dual labor market model | |
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| An evaluation of labor market segmentation | |
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| Industrial composition and earnings inequality* | |
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| State and regional differences in inequality | |
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| Regional differences in income levels | |
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| Industrial composition and rising earnings inequality in the 1980s | |
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| Industry wage differentials* | |
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| Explanations of inter-industry wage differences | |
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| The later literature | |
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| The effects of firm and plant size | |
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| Recent trends and efficiency wage theory | |
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| Occupational wage differentials | |
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| Historical studies | |
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| Trends in the U.S. in the twentieth century | |
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| Rising skewness at the top | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions | |
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| The role of savings and intergenerational transfers in explaining wealth inequality | |
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| Introduction | |
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| The basic life cycle model | |
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| Age-wealth profiles | |
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| Longitudinal analyses* | |
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| Simulation and regression analysis* | |
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| Extensions of the life cycle model | |
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| The role of uncertainty about death and lifetime annuities | |
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| The role of pension and Social Security wealth | |
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| The bequest motive | |
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| Precautionary savings and liquidity constraints | |
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| Intergenerational equity | |
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| Social Security annuity and transfer wealth | |
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| Private intergenerational transfers | |
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| Generational accounting | |
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| Summary and overall assessment | |
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| References and bibliography | |
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| Discussion questions | |
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| Sources of rising earnings inequality* | |
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| Introduction | |
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| Skill-biased technological change | |
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| The IT �Revolution� | |
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| Growing international trade and immigration | |
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| The shift to services | |
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| Institutional factors | |
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| Outsourcing and downsizing | |
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| Changes in the distribution of schooling and ability | |
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| Time trends in key explanatory variables | |
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| Econometric results | |
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| Summary and concluding remarks | |
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| References and bibliography | |
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| Appendix 11.1 Data Sources and Methods | |
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| Discrimination | |
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| Discrimination: meaning, measurement, and theory | |
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| Introduction | |
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| The meaning of discrimination | |
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| The Blinder-Oaxaca decomposition* | |
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| Pre-labor market discrimination | |
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| Theories of discrimination: an overview | |
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| Taste for discrimination | |
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| Statistical discrimination | |
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| The racial stigma model | |
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| The Marxian model | |
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| Overcrowding model of occupational segregation | |
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| Summary | |
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| References and bibliography | |
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| Racial discrimination: progress and reversal for African-Americans | |
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| Introduction | |
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| Trends and status report on racial inequality | |
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| The earnings gap: have African-American workers made gains on whites? | |
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| Changes over time | |
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| Labor force participation and unemployment | |
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| Family income, poverty, and wealth | |
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| Hispanics | |
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| Migration from the South | |
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| Progress in educational attainment | |
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| The role of educational gains on the earnings gap* | |
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| Quality of schooling* | |
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| Returns to schooling for blacks and whites* | |
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| Hispanic Americans* | |
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| Changes in family structure among African-Americans | |
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| Public policy and discrimination | |
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| Public policy programs | |
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| Brown v. Board of Education of Topeka, Kansas, 1954 | |
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| Executive order 10925, 1961 | |
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| Equal Pay Act, 1963 | |
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| Civil Rights Act of 1964 | |
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| Executive Order 11246, 1965 | |
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| The Effectiveness of the anti-discrimination programs | |
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| Civil Rights Act of 1964 | |
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| Affirmative action programs | |
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| Summary and conclusion | |
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| References and bibliography | |
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| Discussion questions and problem set | |
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| The gender wage gap and occupational segregation | |
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| Introduction | |
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| The wage gap and labor force participation trends | |
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| Time trends | |
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| Labor force participation patterns | |
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| Explanations of the rising LFPR of women* | |
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| Explanations of the wage gap | |
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| Human capital differences | |
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| Differences in experience | |
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| Schooling differences | |
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| Effects of human capital differences on the gender wage gap* | |
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| Effects of work interruption on earnings* | |
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| Occupational segregation | |
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| Duncan and Duncan index | |
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| Occupational segregation and the change in the gender wage gap | |
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| Explanations of occupational segregation | |
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| The role of public policy | |
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| Effectiveness of the anti-discrimination programs | |
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| Comparable worth | |
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| Other Issues* | |
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| Effects of wives' earnings on family income inequality | |
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| The feminization of poverty | |
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| International comparisons | |
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| Summary | |
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| References and bibliography | |
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| Discussion questions and problem set | |
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| The role of public policy on poverty and inequality | |
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| Public policy and poverty alleviation | |
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| Introduction | |
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| A brief history of income maintenance programs | |
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| Early developments | |
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| The New Deal | |
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| Post-war developments | |
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| Housing assistance | |
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| Public expenditures on major federal programs | |
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| Unemployment Insurance (UI | |
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| A brief description of the UI system | |
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| Time trends in UI benefits | |
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| Incentive effects of the UI system | |
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| The Social Security system | |
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| Determination of the Social Security benefit | |
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| Incentive effects on labor supply | |
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| The welfare system | |
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| The workings of AFDC and TANF | |
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| Incentive effects of the welfare system | |
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| Labor supply effects | |
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| Welfare participation rates | |
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| Marital status and child-bearing | |
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| Other issues | |
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| Work Programs | |
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| Effectiveness of the jobs programs | |
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| The minimum wage | |
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| Conclusion and overall assessment of government programs | |
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| Effects on poverty | |
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| Proposals for reform | |
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| References and bibliography | |
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| 0 Discussion questions and problem set | |
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| The redistributional effects of public policy | |
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| Introduction | |
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| Equality as a social goal | |
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| Arguments in favor of promoting equality | |
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| Arguments against promoting greater equality | |
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| The Structure of tax systems | |
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| Proportional, progressive, and regressive tax structures | |
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| Inequality measures and the tax system | |
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| Vertical versus horizontal equity | |
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| Distributional consequences of the American tax system | |
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| Tax schedules for the personal income tax | |
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| Effective tax rates for the personal income tax | |
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| The payroll tax | |
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| Other federal taxes | |
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| State and local government taxes | |
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| The overall tax bite? | |
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| International comparisons of taxation | |
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| The overall effective tax rate structure in the United States | |
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| The negative income tax and the EITC | |
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| The distributional effects of government expenditures | |
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| Summary and conclusion | |
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| References and bibliography | |
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| Discussion questions and problem set | |
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| Index | |
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| Note: * Section contains more advanced material or special topics that may be omitted without losing continuity in the book | |