Econ 130 Lectures 7-12 || with 100% Error-free Solutions.
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Module
Econ 130 Lectures 7-12
Institution
Econ 130 Lectures 7-12
Metropolitan area (MSA) correct answers group counties into socioeconomically linked surroundings; contain city w/ 50k+ inhabitants or urban area with 100k+ population
Commuting Zone ("CZ") correct answers group of counties based on commuting flows (i.e. economically integrated); covers entire U...
Econ 130 Lectures 7-12 || with 100% Error-free Solutions.
Metropolitan area (MSA) correct answers group counties into socioeconomically linked
surroundings; contain city w/ 50k+ inhabitants or urban area with 100k+ population
Commuting Zone ("CZ") correct answers group of counties based on commuting flows (i.e.
economically integrated); covers entire USA
Counties correct answers vary in size (often many counties in "metro area"); administratively
based (subdivision of states)
Census tracts correct answers statistically based - no need to coincide w/ other geographies;
roughly 4,000 inhabitants
Census Block Group / Blocks correct answers smaller: block groups within tracts (250-550
housing units); block groups made up of blocks
Chetty, Hendren, Kline, Saez 2014: "rank-rank" slope correct answers relationship between
parent and child income ranks
*note: comparing "rank-rank" relationship across places may obscure differences in the level of
upward mobility
Chetty, Hendren, Kline, Saez 2014: "absolute upward mobility" correct answers expected rank of
child born at 25th percentile
Mobility: slope vs intercept correct answers areas could have a greater intergenerational
relationship, but higher mobility on average (i.e. higher slop and higher intercept)
Mobility: "pivot point" correct answers comparing areas w/ different slopes, intercepts (i.e.
different avg outcomes at different points in distribution
correlation coefficient correct answers corr(X,Y)
bounded between -1 and 1; 0 = uncorrelated; 1 (or -1) = perfectly correlated; measures strength
of (linear) relationship between variables
high mobility areas have... correct answers less residential segregation
less income inequality
"better" schools (test scores in grades 3-8)
greater social capital
greater family stability (two parent households)
high mobility areas have lower correlations with... correct answers average income
local labor market conditions
migration
access to higher education
,add lec 7, 8 correct answers
safety net correct answers government programs that protect people experiencing unfavorable
economic conditions
social insurance correct answers government-provided. insurance against adverse events;
eligibility triggered by "event" (e.g. unemployment, retirement); does not depend on current
needs; worker participation mandatory "pay into" programs via payroll taxes
Public Assistance correct answers i.e. means-tested programs
eligibility based on current needs. benefits generally phased out as income increases (otherwise
benefit given to everyone and not means tested); often categorical eligibility (e.g. requirements
beyond income/assets)
Why the "Safety Net"?: equity/redistribution correct answers transfers to low income families to
increase economic well-being
Why the "Safety Net"?: Investments correct answers may improve longer run outcomes
Why the "Safety Net"?: Automatic Stabilizer correct answers benefits that increase as incomes
fall act as form of automatic stimulus (e.g. UI; also SNAP)
Poverty simple definition correct answers income below what is necessary to meet basic needs
Poverty guideline correct answers federal poverty line
federal poverty line correct answers defines program eligibility (e.g. X% of poverty line)
Poverty thresholds correct answers statistical measure used to calculate # in poverty; varies by
family size and composition, but not geography; via census
Supplemental poverty measure (SPM) correct answers since 2011; includes housing costs, main
safety net benefits; also subtracts necessary medical costs
California Poverty Measure correct answers like SPM but some CA specific tweaks and
variation
"optimal" safety net policy correct answers seeks to balance equity and efficiency concerns
Equity motivations for safety net correct answers we may value:
- redistribution (normative), - "minimum" level of economic well-being (e.g. want to increase
incomes of poor (normative))
-may have longer term causal positive effects, especially for children
Efficiency concerns for safety net correct answers losses due to distortionary effects of taxes
required to fund, disincentives to work (i.e. reduction in labor supply), if categorical elifibility
, requirements distort other choices (e.g. do welfare requirements lead to +single mothers),
distorted choices from in-kind vs cash transfers
Supplemental Nutrition Assistance Program (SNAP) correct answers "food stamps": resourcces
for food purchases, all potentially eligible but varies by some characteristics; usually capped @ 3
months if unemploted (waivers during GR, COVID)
Temporary Assistance for Needy Families (TANF) correct answers cash and non-cash ("in-
kind") benefits (e.g. childcare)
eligibility: families with children; varies by state (but need to work or be in certain approved
activities)
Supplemental Social Security correct answers Cash assistance to seniors, individuals with
disabilities
TANF over time correct answers reach declined significantly over time
"WIC" Special Supplemental Nutrition Program for Women, Infants, and Children correct
answers food, nutrition, other social services; infants, children <5, mothers who are pregnant,
breastfeeding, postpartum
Earned Income Tax Credit (EITC) correct answers Supports low-income working families
(greater benefits w/ children); "refundable" tax credit" can get $$ back even if owe $0 in taxes;
phases in/out w earnings
Most effective at reducing poverty correct answers social security
most effective at reducing poverty among means-tested programs correct answers EITC (+ other
refundable tax credits) --> SNAP/SSI also lifts many out of poverty --> TANF less effective
why is TANF less effective? correct answers - benefit levels low, phase-out occurs before
poverty line
- may have larger impacts on "extreme" or "deep" poverty
Framework for Transfer Programs correct answers - families receive transfer based on household
characteristics + income (Y)
- Guarantee (G): amount to family w/ zero income
- Maximum benefit (M)
- Phase out of benefit (P): highest earnings possible to receive M
- Subsidy rate (S): rate transfer grows as earnings rise > 0
- Tax rate (T): rate at which transfer reduced for earnings above P
moral hazard in transfer programs correct answers disincentive to work caused by high guarantee
(amt to family w/ zero income), high T (tax rate which transfer reduced for earnings above phase
out)
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