5.1 Living standards
Standard of living: social & economic wellbeing of individuals in a country at a particular pt in time
Measures of living standard
- GDP per capita
- Human Development Index (HDI) – healthcare, education & income level
Explain how HDI is measured. (6)
- standard of living – GDP per capita
- longevity – life expectancy at birth
- Education – adult literacy
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Living standards vs income distribution
- Productivity levels
- Role of gov – eg tax → redistribute income
- Pop size
- Distribution of nation income eg gov ↑ spending on military ≠ ↑ living standards
- Regional difference
- General price level – ↑ inflation, ↑ cost of living, ↓ living standards
- Level of education
- Level of freedom
5.2 Poverty
Poverty: condition when ppl lack adequate income & wealth to sustain basic standard of living, living on less than eg $1.25 a day
Absolute poverty: where ppl do not have access to basic items eg food
Relative poverty: where ppl are relatively poorer than other ppl in the economy eg have access to fewer goods and services than others, relative poverty always exists
Analyse how long-term unemployment cause relative poverty
- Define relative poverty
- They have very low or no income so they don’t have purchasing power to buy goods & services that an average individual can eg healthcare
- They get depressed, reduces incentive to find work
- Not able to provide children with good education so they cannot find a high-paid job
Causes of poverty
- Unemployment
- Low wages
- Poor healthcare
- Age
- Low literacy rates
- High pop growth
- Poor infrastructure eg transportation
- Low FDI
- High public debt
- Reliance on primary sector output
- Corruption & instability eg civil war / dishonest gov officials
Policies to ↓ poverty & redistribute income
Discuss which policies are likely to be most successful in reducing the extent of poverty in a country. (8)
- Promote economic growth
- Improve education
- Provide more generous state benefits eg state pension
- Use progressive taxation
- Introduce / increase national min. wage
5.3 Population
Population: total no. of inhabitants of a particular country
Population growth: rate of change in size of country’s population
Birth rate: no of live births per 1000 of pop per year
Fertility rate: average no of births per woman
Replacement fertility rate: no of children that average woman must have to maintain stable pop size
Explain why the birth rate is decreasing (4)
- Women marrying later,
- ↑education,
- ↑job opportunities
- Introduction of family planning
Death rate: no of deaths per 1000 of pop per year
Immigration: ppl enter country to live/work
Emigration: ppl leave country to live/work
Net migration rate = immigration – emigration
Reasons for different rates of pop growth in different countries
- Birth rate
- Death rate
- Net migration rate
- MEDCs vs LEDCs
Effects of changes in size & structure of pop on different countries
Optimum population: output of goods/services per capita of pop is maximised
Under population – insufficient labour
Over population – lead to shortage
Population distribution: composition & structure of country’s population
Dependent population: 0-14 (school) & 65+ (retirement)
Working population: 15-65 (active labour force)
Population distribution impact
- Consumers – different demand based on age & gender
- Eg Elderly ppl spend more on healthcare
- Firms – ↑ pop growth, ↑ labour supply
- Gov – ↑ workforce, ↑ tax revenue
- Economy – ↑ pop growth, ↑ demand of goods/services, ↑ scare resources, ↑ pressure
- Natural environment – eg pollution
5.4 Differences in economic development between countries
Economic development: intangible concept that considers quantitative & qualitative variables in raising standard of living within a country
Factors accounting for differences in economic development
- GDP
- Productivity
- Population growth
- Primary, secondary, tertiary sector
- Saving & investment
- Education
- Healthcare
Characteristics of developing economies (6)
- low level of savings, education & healthcare
- high rate of population growth
- high proportion of workers in the primary sector