Applied Assignment Joseph - 031031

ECN 243 ASSIGNMENTS
DEPT: ECONOMICS
NAME: JOSEPH OKPA
MATRIC NO: 190901043
ASSIGNMENT 2
THE RELATIONSHIP BETWEEN POVERTY AND UNEMPLOYMENT
There is a strong link between poverty and unemployment. The burden of individuals who are jobless is placed on
families with low incomes, which reduces per capita expenditure.
The fall in consumption levels further reduces a person's earning capacity, making it impossible for him to escape
the cycle of poverty. The bulk of the poor, it has been observed, are either jobless or engage in sporadic casual labor.
They are unable to meet their basic needs due to their inconsistent income, which has kept them in poverty. We can
thus state with certainty that there is a strong positive correlation between poverty and unemployment.
THE RELATIONSHIP BETWEEN POVERTY AND UNEMPLOYMENT IN USA BETWEEN 2000 and
2020
THE RELATIONSHIP BETWEEN POVERTY AND UNEMPLOYMENT IN USA
YEARS Unemployment, total (% of total labor Poverty headcount ratio at $2.15

force) (modeled ILO estimate) a day (2017 PPP) (% of
population)
2000 3.99000001 0.7

2001 4.730000019 0.7
2002 5.78000021 0.7
2003 5.989999771 1
2004 5.53000021 1
2005 5.079999924 1
2006 4.619999886 1
2007 4.619999886 1
2008 5.78000021 1
2009 9.25 1
2010 9.630000114 1
2011 8.949999809 1
2012 8.069999695 1
2013 7.369999886 1
2014 6.170000076 1.2
2015 5.28000021 1.2
2016 4.869999886 1
2017 4.360000134 1.2
2018 3.900000095 1
2019 3.670000076 1
2020 8.050000191 0.2
THE RELATIONSHIP BETWEEN POVERTY

AND UNEMPLOYMENT IN USA
12
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Unemployment, total (% of total labor force) (modeled ILO estimate)

Poverty headcount ratio at $2.15 a day (2017 PPP) (% of population)
It is clear that poverty and unemployment have a significant correlation in the United States over the previous 20
years. Particularly when unemployment is high, poverty rates also tend to be greater.
For instance, the US unemployment rate increased from 4.7% to 10% during the Great Recession, which lasted from
2007 to 2009. The poverty rate also rose over this time, from 12.5% to 15.1%. This implies that people are more
likely to become poor when they lose their work.
On the other side, poverty rates often go down when the economy is strong and the unemployment rate is low. This
was evident in the early 2000s when the poverty rate in the US dropped from 12.1% to 11.3% and the
unemployment rate in the country declined from 4.0% to 4.5%.
The statistics as a whole indicate that unemployment and poverty are closely related, and that lowering
unemployment through policies can also have a favorable effect on poverty rates.
In the United States, there has been a definite correlation between poverty and unemployment during the past 20
years. Rates of poverty also tend to be higher when unemployment is high.
For instance, the unemployment rate in the United States increased from 4.7% to 10% during the Great Recession of
2007–2009.
The poverty rate increased over this time, going from 12.5% to 15.1%. This suggests that people are more likely to
become destitute when they lose their jobs in greater numbers.
Poverty levels often decrease when the economy is doing well and unemployment rates are low. This became clear
in the early 2000s, when the poverty rate in the United States fell from 12.1% to 11.3% and the unemployment rate
in the country went from 4.0% to 4.5%.
Overall, the research shows that unemployment and poverty are intricately linked and that actions taken to cut
unemployment can likewise lower rates of poverty.
ASSIGNMENT 3
THE CONCEPT OF LORENZ CURVE

Lorenz curve is a graphical representation income or wealth inequality on a graph. The horizontal axis of
the graph represents percentiles of the population, according to income or wealth.
A straight diagonal line is used to illustrate the Lorenz curve; underneath it is the Lorenz curve, which
shows an estimated distribution of wealth or income. The Gini coefficient is the region that is in between the straight
and curved line.
The Lorenz curve depicts unequal wealth distribution and economic inequality. The distance between the
curved line and the straight diagonal line influences how extreme the disparity is.
The Gini coefficient, a statistical indicator of how wealth is distributed throughout a population, was
developed in 1912 by an Italian statistician named Corrado Gini.
The coefficient is a number between 0 (or 0%) and 1 (or 100%), where 0 denotes complete equality and 1
denotes perfect inequality. Given that we do not account for negative revenues, values greater than one are not really
feasible. (Income is never negative even at its lowest point.)
Thus, a country in which every resident has the same income would have an income Gini coefficient of 0. A
country in which one resident earned all the income, while everyone else earned nothing, would have an income
Gini coefficient of 1. The Gini coefficient is an important tool for analyzing income or wealth distribution within a
country or region, but, it should not be mistaken for an absolute measurement of income or wealth. A high-income
country and a low-income one can have the same Gini coefficient, as long as incomes are distributed similarly
within each country.
According to the OECD, Turkey and the U.S. both had income Gini coefficients around 0.39–0.40 in 2016,
though Turkey’s GDP per person was less than half of the U.S.’s (in 2010 dollar terms).
The Gini coefficient is equal to the area below the line of perfect equality minus the area below the Lorenz curve,
divided by the area below the line of perfect equality. In the graph above, the Gini coefficient is the area below the
dashed line but above the solid line. The Gini coefficient is used to measure the extent of inequality. It can also be
used to compare two different nations or countries to see which has more inequality.

Applied Assignment Joseph - 031031

Uploaded by

Copyright:

Available Formats

Applied Assignment Joseph - 031031

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Applied Assignment Joseph - 031031

Uploaded by

Copyright:

Available Formats

ECN 243 ASSIGNMENTS

THE RELATIONSHIP BETWEEN POVERTY AND UNEMPLOYMENT IN USA

YEARS Unemployment, total (% of total labor Poverty headcount ratio at $2.15

2000 3.99000001 0.7

THE RELATIONSHIP BETWEEN POVERTY

Unemployment, total (% of total labor force) (modeled ILO estimate)

THE CONCEPT OF LORENZ CURVE

You might also like