Living standards and poverty
G3 Economics - syllabus K343, 2027
Measuring living standards with GDP per head and the HDI, why they differ, and the causes of and policies against poverty.
- Measuring living standards: real GDP per head and HDI
Real GDP per head measures average income; the HDI adds health and education for a wider view of living standards.
- Why living standards and income differ
Living standards differ within and between countries because of differences in jobs, skills, wealth, resources and government policy.
- Absolute and relative poverty
Absolute poverty is not having enough for basic needs; relative poverty is being poor compared with others in the same society.
- Causes of poverty
Poverty is caused by unemployment, low wages, illness, age and environmental factors such as droughts and floods.
- Policies to reduce poverty and redistribute income
Growth, education, healthcare, benefits, progressive taxes and minimum wages can all reduce poverty, each with trade-offs.
- Put it together: Reduce poverty
A government has extra funds to reduce poverty. Compare three uses.
What you will be able to do
I can use real GDP per head and the HDI to measure living standards and weigh each measure.
Syllabus K343, 5.1.1. Indicators of living standards: real Gross Domestic Product (GDP) per head; Human Development Index (HDI) and its components; advantages and disadvantages of real GDP per head and HDI as indicators
Taught in Measuring living standards: real GDP per head and HDI
I can explain why living standards and income distribution differ within and between countries.
Syllabus K343, 5.1.2. Comparing living standards and income distribution: reasons for differences in living standards and income distribution within and between countries
Taught in Why living standards and income differ
I can tell absolute poverty from relative poverty.
Syllabus K343, 5.2.1. Definitions of absolute and relative poverty: difference between absolute poverty and relative poverty
Taught in Absolute and relative poverty
I can explain the causes of poverty: unemployment, low wages, illness, age and environment.
Syllabus K343, 5.2.2. Causes of poverty: unemployment; low wages; illness; age; environmental factors
Taught in Causes of poverty
I can describe the policies that reduce poverty and redistribute income.
Syllabus K343, 5.2.3. Policies to alleviate poverty and redistribute income: promoting economic growth; improved education; improved healthcare provision; more generous state benefits; progressive taxation; national minimum wage (NMW)
Taught in Policies to reduce poverty and redistribute income