The Economics of Poverty and Discrimination

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  • Edition: 9th
  • Format: Paperback
  • Copyright: 2008-01-01
  • Publisher: Pearson College Div
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For courses in Economics of Poverty and Discrimination, Welfare Politics and Policy, Social Problems, and Sociology of Poverty, in the departments of Economics, Sociology, Urban Studies, Education and Social Work. As the leading college text in the field for over twenty years, this book has been distinguished by its relevant coverage, tight organization, multidisciplinary perspective, and timeliness. The ninth edition preserves these qualities while incorporating new reference material.

Table of Contents

The Dimensions of Povertyp. 1
Views of Inequality and Povertyp. 1
The Continuing Controversyp. 1
What to do?p. 2
Too little government assistance?p. 3
Or too much aid?p. 3
Equity and efficiencyp. 4
Causes and Curesp. 4
Flawed characterp. 4
Restricted opportunityp. 6
Big Brotherp. 7
Self-interestp. 7
Policy implicationsp. 8
Historical perspectivesp. 8
Inequalityp. 11
Differing explanationsp. 11
Equity versus efficiencyp. 11
Dimensions of Well-Beingp. 12
Income versus wealthp. 13
Transitory versus permanent incomep. 13
Life-cycle dynamicsp. 14
Public provisionsp. 14
Social equalityp. 15
Discriminationp. 15
Poverty: Drawing a Linep. 16
The absolute approachp. 16
The relative approachp. 17
Summaryp. 20
Further Readingp. 21
Counting the Poorp. 22
The Distribution of Incomep. 22
The Official Poverty Linep. 24
The concept of minimum needsp. 25
Units of measurep. 26
Poverty thresholdsp. 27
The CEA linep. 27
The SSA indexp. 29
The current poverty indexp. 29
The Number of Poor Peoplep. 32
The official poverty countp. 33
The poverty ratep. 33
How poor?p. 35
Measurement Problemsp. 35
Too low a standard?p. 35
Too high a standard?p. 36
In-kind incomep. 36
Underreportingp. 38
Income mobilityp. 39
The uncounted poorp. 40
Latent povertyp. 40
The call for revisionp. 41
Characteristics of the Poorp. 42
Age and family statusp. 42
Geography and residencep. 43
Labor force statusp. 45
Similarities and differencesp. 46
Summaryp. 47
Further Readingp. 47
Web Linksp. 48
Causes of Povertyp. 49
Labor Force Participationp. 49
Income Sourcesp. 49
Two-parent Familiesp. 50
Female-headed familiesp. 52
Labor Force Statusp. 54
Participation and povertyp. 54
The nonparticipantsp. 55
Unemploymentp. 57
The Process of Economic Deteriorationp. 58
Subemploymentp. 59
Discouraged workersp. 59
Other marginally attached workersp. 60
Underemploymentp. 60
Subemploymentp. 61
Poverty implicationsp. 61
The Question of Causationp. 62
Do the poor really try?p. 62
Macroeconomic forcesp. 65
Poverty Impact of Cyclical Unemploymentp. 68
Summaryp. 69
Further Readingp. 72
Web Linksp. 72
The Unemployment-Inflation Trade-Offp. 73
The Phillips curvep. 73
The Working Poorp. 76
Work Experience and Povertyp. 76
Weeks of work and hoursp. 76
The working poorp. 77
How much work?p. 79
More measurement problemsp. 79
The significance of secondary workersp. 80
Searching for Explanationsp. 82
Minimum-Wage Jobsp. 82
Low Wagesp. 84
Poor jobsp. 86
Why Wages Are So Lowp. 88
Summaryp. 89
Further Readingp. 90
Web Linksp. 90
Does Prosperity Trickle Down?p. 91
The trickle-down perspectivep. 91
The dual labor-market perspectivep. 92
Age and Healthp. 93
Agep. 93
Declining poverty ratep. 93
Diversity among the agedp. 95
Sources of economic supportp. 96
New poverty or continuing poverty?p. 99
Rising health costsp. 102
Tax burdensp. 103
Making dop. 104
Assessing causationp. 104
Healthp. 105
Health costsp. 105
Causalityp. 105
Health insurancep. 107
Intergenerational Linksp. 108
Mental Healthp. 108
Summaryp. 109
Further Readingp. 109
Web Linksp. 110
Family Size and Structurep. 111
Family Sizep. 111
Poverty ratesp. 112
The potential impactp. 112
Declining family sizep. 114
The causal relationp. 114
Family Structurep. 115
Changing family patternsp. 115
Economic implicationsp. 117
Poverty impactp. 118
Causationp. 119
Summaryp. 123
Further Readingp. 124
Web Linksp. 124
The Underclass: Culture and Racep. 125
The Culture of Povertyp. 125
Norms versus traitsp. 126
A question of opportunitiesp. 128
Wilson's Underclass Theoryp. 129
Testing the theoryp. 129
Direct tests of aspirationsp. 130
Indirect tests of predicted behaviorp. 131
Assessmentp. 133
The Racial Inferiority Theoryp. 133
Intelligence and statusp. 135
IQ scoresp. 136
Resolving the issuesp. 137
Other complicationsp. 138
Summaryp. 139
Further Readingp. 140
Web Linksp. 140
Education and Abilityp. 141
Education and Incomep. 141
Poverty ratesp. 142
Labor-market effectsp. 142
Increasing skill premiumsp. 142
Paths of Causationp. 144
Overlapping causesp. 144
Education as a sorting devicep. 146
The content of educationp. 149
Ability and Incomep. 149
Which ability matters?p. 150
IQ and schoolingp. 150
Summaryp. 152
Further Readingp. 153
Web Linksp. 153
Discrimination in Educationp. 154
Discriminationp. 154
Attitudes versus actionp. 155
The relevancy standardp. 155
Costs and benefits of discriminationp. 157
Proving discriminationp. 159
Racial Discrimination in Educationp. 159
Disparate outcomesp. 160
School segregationp. 161
Equality of facilitiesp. 163
Inherent inequalitiesp. 165
Class Discrimination in Educationp. 166
School financesp. 166
Educational attainmentsp. 167
The question of abilityp. 167
Sex Discrimination in Educationp. 169
Gender segregationp. 170
Graduate degreesp. 170
Summaryp. 172
Further Readingp. 173
Web Linksp. 173
Discrimination in the Labor Marketp. 174
Racial Discrimination in the Labor Marketp. 174
Disparities in earningsp. 175
Educational differencesp. 176
Components of earnings disparitiesp. 178
Who discriminates?p. 182
Labor unionsp. 183
Employersp. 185
Class Discrimination in the Labor Marketp. 186
Sex Discrimination in the Labor Marketp. 187
Occupational segregationp. 188
Summaryp. 190
Further Readingp. 191
Web Linksp. 191
Policy Optionsp. 193
Welfare Programsp. 193
Welfare versus Social Insurancep. 194
Welfare: The Cash Assistance Programsp. 196
Inadequaciesp. 196
Inequitiesp. 197
Family disincentivesp. 199
Work disincentivesp. 200
Conflicting welfare goalsp. 203
The goal compromisep. 204
Welfare Reforms, 1982-2000p. 205
State experiments, 1982-1988p. 205
The family support act of 1988p. 206
State waivers, 1991-1995p. 207
PRWOA: The 1996 welfare reformsp. 207
The controversyp. 209
Observed effectsp. 209
Welfare: The In-Kind Programsp. 212
Food stampsp. 212
Medicaidp. 212
Housing assistancep. 213
Nutrition programsp. 213
The welfare packagep. 213
Revisiting the goal conflictp. 214
Guaranteed incomep. 217
Guaranteed jobsp. 219
Workfarep. 219
Edfarep. 221
Promoting familiesp. 221
The Limits of Welfarep. 221
Summaryp. 223
Further Readingp. 223
Web Linksp. 224
Social Insurance Programsp. 225
Social Securityp. 225
OASDHI programsp. 226
Financingp. 226
Benefitsp. 227
Poverty impactp. 228
Medicarep. 232
Hospital insurancep. 232
Supplemental medical insurancep. 232
Poverty impactp. 233
Unemployment Insurancep. 233
Eligibility conditionsp. 233
Benefitsp. 234
Poverty impactp. 235
Child-Support Enforcementp. 236
Child-support gapsp. 236
Enforcement policiesp. 237
Poverty impactp. 238
Summaryp. 240
Further Readingp. 241
Web Linksp. 241
Employment Policiesp. 242
Aggregate Demand Policiesp. 243
Demand managementp. 243
Full employment versus price stabilityp. 243
The quality of jobsp. 244
Training Programsp. 246
Job vacanciesp. 246
The CETA programp. 247
JTPA programsp. 248
Workforce Investment Actp. 248
The WIN programp. 249
The JOBS programp. 250
State block grantsp. 250
Generic problemsp. 251
Tax Creditsp. 251
Employer creditsp. 252
Employee creditsp. 253
Family Policyp. 255
A Coordinated Approachp. 255
Summaryp. 256
Further Readingp. 257
Web Linksp. 257
Equal Opportunity Policiesp. 258
Equal Employment Opportunity Policiesp. 259
The EEOCp. 260
The OFCCPp. 260
Quotas and guidelinesp. 261
Reverse discriminationp. 262
Comparable worthp. 264
Class-based preferencesp. 264
Equal Education Opportunity Policiesp. 265
Limits on federal policyp. 265
De jure versus de facto segregationp. 266
Housing patternsp. 266
Busingp. 269
Fiscal disparitiesp. 270
Compensatory educationp. 273
College admissionsp. 273
School-based quotasp. 275
Summaryp. 276
Further Readingp. 277
Web Linksp. 277
Directions and Prospectsp. 278
The Causes of Povertyp. 278
Policy Directionsp. 280
Welfare reformp. 281
Economic prosperityp. 282
Social insurancep. 282
Education and trainingp. 283
Macroeconomic policyp. 283
Equal opportunityp. 284
Causes, Attitudes, and Policyp. 284
Indexp. 287
Table of Contents provided by Syndetics. All Rights Reserved.


Dramatic changes have occurred in the landscape of poverty and discrimination since the last edition of this text was published. The landmark welfare reforms of 1996 (the Personal Responsibility and Work Opportunity Act) became fully effective in 2001, when the legislated time limits on welfare eligibility first took hold. In those first five years of welfare reform welfare caseloads plunged. Some observers credit tougher eligibility conditions for the caseload decline; others point to the strong expansion of the U.S. economy in those same years. After the economy started slipping in spring 2001, the debate over cause and effect took on a more urgent tone. Would a slumping economy reverse the caseload declines of 1996-2001, or did welfare reform lay a more permanent foundation for financial independence? With both state and federal budgets strained by slumping revenues, the range of potential policy responses to an upsurge in welfare caseloads was severely limited. Aside from changes in welfare caseloads, there is the broader issue of changes inpoverty.The poverty population didn't decline as dramatically as the nation's welfare population. Between 1996 and 2001, welfare caseloads fell by more than 50 percent as nearly 6 million people left welfare. During those same years, however, the poverty population declined by only 3.3 million, or by 20 percent. This suggests that welfare reduction isn't synonymous with poverty reduction. While most welfare leavers moved up the economic ladder, a good many others remained in or near poverty. The challenge for policy makers has been to extend more completely the success of welfare decline to the goal of poverty reduction. The financial and economic turbulence of the last decade has also sparked broad interest in issues of inequality. The rise and fall of the dot.coms, the surge and collapse of the stock market, the revelations of corporate malfeasance and executive largesse have all heightened awareness of how unequal incomes can be. With poverty on the (slow) decline, this heightened awareness has fostered more inquires into the nature and causes of inequality. These new inquires go beyond explanations forpovertyto broader questions of how relative incomes are determined. This ninth edition responds to these questions by adding a new chapter (2) that examines the extent and permanency of inequalities in the United States arid other nations. Another highlight of this edition is the focus on the rapidly changing parameters of affirmative action. The California Civil Rights Initiative of 1996 started the current reversal of affirmative action. Since then, racial quotas have been jettisoned in favor of "race-conscious" policies that allow ethnicity to be one of many factors in hiring and admissions decisions. Even that much weaker form of affirmative action is under attack now. As this edition goes to press, the U.S. Supreme Court is considering a challenge to the race-conscious admissions policy of the University of Michigan's law school. In the interim, many institutions are adopting broader, class-based preferences that favor minority groups without explicitly targeting them. MULTIDISCIPLINARY APPROACH All of these changes more than just justify a fresh look at poverty, discrimination, and related topics. That is the purpose of this new edition. Once again, an effort has been made to incorporate the latest research findings from diverse disciplines, including economics, sociology, political science, gerontology, anthropology, law, and public health. Although my own training in economics gives a unique structure and perspective to the text, the discussion ranges far beyond the conventional boundaries of academic disciplines. This is particularly evident in expanded discussions of the urban underclass, the increasing feminization of poverty, the renewed IQ controversy, the behavioral constraints on welfare reform, and public attitude on pove

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