What are the determinants of income?
For individuals, the major determinants of income are employment, place of residence, and education. The poor are primarily those without jobs, those who live either in the centers of large cities or in rural areas, and those without much education. • Do government programs intended to reduce poverty benefit the poor? Changing the income distribution in society has been the main target of government policy to reduce poverty; since 1929, income inequality in the United States has decreased. Progressive income taxes, whereby richer people pay proportionately more of their income in taxes, reduce income inequality and generate revenue that can be used for transfer payments to the poor. These are the main transfer programs: Social insurance (social security, unemployment insurance, Medicare) Cash welfare (Temporary Assistance for Needy Families, Supplemental Security Income) In-kind transfers (Medicaid, food stamps, school lunch program, energy assistance) Employment programs (jobs and job
