Social policy of the state - EC1201: Macroeconomics - Business informatics. Poverty itself in government practice is measured using the subsistence minimum, which is expressed in two types: social and physiological. To measure inequality ra

Income and its types. Income differentiation.

Income cash or material values received by the state, individual or legal entity as a result of any activity over a certain period of time.

In a private sense, income refers to state income, income of organizations or income of the population:

State revenues income received by the state through the collection of taxes, duties, payments, foreign trade transactions, foreign loans, foreign aid and used to carry out government functions.

Income of the organization increase economic benefits as a result of the receipt of assets ( Money, other property) and (or) repayment of obligations, leading to an increase in the capital of this organization, with the exception of contributions from participants (owners of property). Income from common species The organization's activities are revenue from the sale of goods and services.

Income of the population — personal income citizens, families and households received in the form of cash. These include: wage, pension, scholarship, allowance, income from the sale of goods produced on one’s own farm, cash receipts in the form of fees for services rendered, royalties, income from the sale of personal property, and its rental.

Income classification

1. Cash income of the population includes the entire total of cash receipts for certain period time. These include wages, income from entrepreneurial activity and provision of various types of services, income from all types and forms of ownership, and gratuitous cash receipts and benefits.
2. Income in kind represent the entirety of material goods and services intended for own consumption within households. Like wages, income comes in two forms: nominal and real.
3. Nominal income represent the amount of cash receipts without taking into account their changes under the influence of taxation and price dynamics. Nominal income minus taxes and other mandatory payments form disposable income.
4. Real incomes are calculated based on disposable incomes, taking into account changes in retail prices and tariffs (index consumer prices). Real income represents the totality of material and intangible benefits, which the population has as a result of their purchase, receipt or possession.

The main components of the population's income are income of wage earners, business income, income from property, all types and forms social assistance and support.

A general indicator characterizing the level of well-being of the population is the amount of national income (gross or net) per capita. Per capita income only allows us to compare the levels of these incomes in various countries peace. It does not answer the question about the degree of fairness in the distribution of income among the population, about the differentiation of income in society.

Income distribution indicators

To determine the degree of uneven distribution of income among the country's population, various methods calculation. In particular, the functional distribution of income allows us to determine the share of the corresponding factor of production in national income. Classification of income according to their value shows the distribution of national income between individuals and families. These indicators can also be established according to the criteria for the income received to belong to certain areas economic activity, professional, social groups population, etc.

Let's look at the most widely known and tested social practice indicators of income differentiation of the population.

The Lorenz curve represents is a graphical method for determining deviations in the income distribution system from the line of abstract possibility of absolute equality in their distribution. To construct the Lorenz curve, the shares of families (in % of their total number) with the corresponding percentage of income are plotted on the x-axis, and the shares of income received by these families are plotted on the y-axis. Moreover, the shares are chosen arbitrarily. However, to build a line of absolute equality, it is necessary to strictly observe the proportional distribution of income: a certain share families correspond to the same share of income.

To assess the degree of uneven distribution of income between population groups, it is used income concentration index (Gini coefficient). It tends to zero as the level of income among the population equalizes and to one in the case of increasing polarization of society by income level.

The next indicator differentiation of income of the population is decile coefficient, which allows for a comparison of income received on average by the most and least well-off groups of the population (each group makes up 10% of total number population). It is also necessary to take into account the fact that the growth of income differentiation is accompanied by property differentiation, when bureaucratic, commercial and criminal circles enrich themselves through redistribution, appropriation of a significant part of state property(property, apartments, dachas, cottages, cars). This further divides society into rich and poor and acutely raises the problem of social justice.

Living wage

The growth of income differentiation objectively determines the emergence of the problem of poverty, the threshold of which is obviously determined by the minimum consumer goods necessary for a person. It is necessary to distinguish the biological minimum from the subsistence minimum. The first characterizes the principle of physical survival, while the living wage is determined by the socio-economic conditions of society.

The living wage expresses the minimum acceptable material security, below which there is a threat to the reproduction of the country's population. The dynamics of the living wage is directly dependent on changes in socio-economic living conditions and social policy states. It is the subsistence minimum that is the line beyond which poverty and impoverishment of the population begins.

To calculate the cost of living the so-called consumer basket is taken (a set of essential goods), which increases along with the improvement of the socio-economic conditions of the population. At the same time, we must be aware that the consumption structure low-income families significantly different from the structure consumer basket families with average incomes. First, the bulk of expenses among the poor is on food. Secondly, the structure of food products is dominated by essential goods with low elasticity of demand.

Special attention deserves the monetary value of a living wage, since it is exposed to a number of factors. First of all we're talking about about the rise in prices for consumer goods, which necessitates a monthly adjustment of the amount of income received and their indexation. In addition, when calculating the consumer basket, as a rule, they proceed from a set of cheap and accessible goods, whereas in reality a person is faced with their shortage and the need to purchase more expensive goods. Quality also plays an important role in this regard. consumer goods, purchased by these segments of the population.

The cost of living is a kind of guideline in determining the minimum wage, unemployment benefits and other transfer payments. In conjunction with wages a living wage can play a stimulating role in activating labor activity(if the minimum wage is more than the subsistence level) or perform an anti-motivation function in relation to work (if living wage greater than or equal to the minimum wage).

Wage forms most consumer income. It is defined in the broad and narrow sense of the word. In a broad sense, this term includes remuneration for the labor of a wide variety of categories of workers, actual workers of various professions and highly qualified specialists whose work requires high costs for education and special training.

In a narrow sense, wages are the wage rate, that is, the price for using a unit of labor for a certain time (hour, day, month). This distinction allows us to determine the general (average) level of remuneration and the actual salary.

The general level of wages depends on the quantity and quality of capital, the quality of labor, and production methods. The overall level of wages rises when the supply of labor is limited relative to other factors and fixed demand.

Salaries in competitive labor markets.

The competition model, its characteristic features:

a) a large number of competing firms on the demand side and numerous offers of the same type of labor;

b) neither firms nor workers dictate wages;

c) the wage level is constant for an individual firm and an individual worker.

Monopsony model, its characteristic features:

a) those engaged in a specific type of work work in the same company;

b) other use of labor is associated with geographic relocation and retraining;

c) the firm dictates wages.

Bilateral monopoly model:

a) on the one hand, a monopsonist buyer of labor;

b) on the other hand, a monopolist-seller of labor represented by a trade union;

c) in this case, the salary approaches the competitive level.

The differentiation of wage rates is determined by:

professionalism and diverse abilities;

differences in types of work that differ in their attractiveness;

the presence of imperfect competition in labor markets.

Highly skilled labor is rewarded for its significant contribution to profits and compensates for past efforts associated with the formation of human capital (education, training, health). People with rare talents receive a talent bonus in addition to their wages.

Interest as a return on capital. Capital can be thought of as value that produces a stream of income.

Percent is the income for the use of capital, which in practice is represented by:

a) in the form of loan interest, if the capital has monetary form;

b) in the form of income on property, if the owner of the capital is part of the unincorporated sector;

c) in the form of corporation profits, if the owners are shareholders.

When determining percentage, it is important to emphasize the role of the time factor.

The profitability of loans can be expressed as the interest rate (norm) =

The interest rate should not exceed the rate of profit, since the source of interest is profit. Actual level interest rates are determined by the relationship between supply and demand for loan capital in the money market. Factors influencing the interest rate: degree of risk when providing a loan; deadlines; the degree of restriction of competition conditions in the money market.

There are nominal interest rates (in current prices) and real (taking into account inflation). Only real interest rates matter in economics for decision making.

The role of the interest rate:

a) a decrease in the interest rate leads to an expansion of production, and an increase in it leads to a reduction in production;

b) distribution of funds between the most productive industries.

The accumulation and investment of capital is carried out with the aim of generating income in the future. An effective investment project is a project whose annual income is not lower than the interest rate on any capital asset, including the bank interest rate. Calculus today, current analogue of the amount of future income from capital assets paid through certain deadlines at the existing interest rate is called discounting. Based on the bank interest rate, the income in the form of interest that can be received from future investment projects is calculated. Discounting is carried out according to the formula:

D =

;

where D is the current discounted value of the asset; D t – annual future income from an asset invested for a period equal to t years; r – bank interest rate (norm).

Investment decisions are justified based on the price of investment goods on the market, interest rates, the level of annual income from the use of these goods, and the price of their possible sale at residual value.

Business income (profit)– remuneration of the entrepreneur for performing the following functions: a) combining factors of production into a single production process; b) introduction of new products and technologies; c) the risk associated with investing your funds. This is the part of the profit that remains at the disposal of the entrepreneur after paying for the loan. As you know, part of business income is called normal profit. This is the minimum income to retain an entrepreneur in this industry. But if total income exceeds total costs (including normal profit), then this excess goes to the entrepreneur in the form of economic profit. Zero economic profit is a consequence of a static economy and free competition. But in real life this is not the case. Any market situation is characterized by a certain uncertainty as a result economic dynamics, and a certain monopolization of the market, which generates economic profit. The desire to obtain it pushes the economy towards further development.

Profit functions:

Promotes effective use of resources, which can be shown in a logical chain: profit – innovation – investment – ​​growth in employment, output – increase in well-being.

Stimulates the most efficient allocation of resources among alternative industries.

Profit rate =

If the rate of profit rises, then this is a signal for expanding the necessary sphere of production.

Economic rent is the price that is paid for the use of land and other natural resources, the supply of which is limited (inelastic).

Despite conceptual differences regarding rent, economists emphasize the heterogeneity of land plots in terms of their productivity, and therefore differences in demand for them.

R Figure 9.2 - Demand and supply of land

If we plot the demand (D) for land and supply (S) on a graph, then supply will be inelastic (Fig. 9.2). Demand, in turn, is the only factor that directly affects rent. The better the site, the higher the demand, and therefore the higher the rent.

Types of rent. Differential rent exists in two forms. Differential rent I arises due to closer location land plots to the market, as well as greater fertility in comparison with the worst areas. It is assigned by the landowner. Differential rent II is formed as a result of intensive farming due to additional capital investments and is appropriated by the land lessee during the validity of the lease agreement.

Monopoly rent- rent received for exceptionally suitable conditions for the production of agricultural products.

Absolute rent is paid on all plots of land, regardless of location and fertility, because the landowner does not rent out the land for free.

The price of land is closely related to rental relations. The landowner can sell the land provided that the amount he receives will not be less than the income in the form of interest received from investing this amount in the bank.

As a result, the price of land is capitalized land rent and is determined by the formula:

In the mining industry, differential rent is generated by differences in labor productivity and cost, which are caused by the unequal wealth of mineral deposits, their depth, etc. Product prices are set according to the worst production conditions (at the same time, normal profits are received). In the best areas, where minerals are extracted with lower economic costs, income is generated in the form of differential rent, which remains to the owner of the land.

In Fig. 9.3a, b differential rent is shown using the marginal cost (MC) and average total cost (ATC) curves for two oil producing companies.

R Figure 9.3a - Availability of differential rent

Figure 9.3b - Absence of differential rent, since the price of oil and the cost of its production (ATC) in conditions of deeper formations coincided

Income and its types. In accordance with the theory of factors, as we already know, the main production factors are: 1) land, including all natural resources (forests, mineral deposits, water resources and so on.); 2) capital, or investment resources (means of production, vehicles and sales network); 3) labor, i.e. all physical and mental capacity people used in the production of goods and services; 4) entrepreneurial ability.

The income for each of the listed factors, in accordance with the theory, is equal to the marginal contribution of this factor to the income received by the enterprise (firm) after the sale of products.

Such a distribution of income could be considered fair in relation to both workers and owners of property resources (land, capital, etc.). In reality, the distribution of income based only on marginal productivity theory leads to significant inequality, primarily due to inequality in the distribution of productive resources. Therefore, in the conditions of modern democratic society government income policies aimed at mitigating these inequalities are needed.

Due to imperfect competition in the market, income (including wage rates) often does not reflect the contribution of factors of production to output. Let's take a closer look at what constitutes income for each factor. Nominal incomes characterize the level cash income regardless of taxation and price changes. Real income characterizes income taking into account changes in retail prices and tariffs, as well as expenses for paying taxes and other obligatory payments. To determine real income, taxes and other payments to the budget are subtracted from the total amount of all income.

The remaining amount, equal to the cost of goods consumed and partially accumulated by the population, forms the fund of the final income of the population actually used in a given period. The dynamics of real incomes is determined by comparing final incomes for different periods, expressed in comparable prices.1 Wages are the price paid for the use of labor, in other words, for labor services provided by workers of various professions in the implementation of their business activities.2 The price of any product includes integral part price natural resources, including land. The income that this factor of production brings is called rent, or economic rent.

In a broader sense, economic rent is the price paid for the use of land and other natural resources, the supply of which is strictly limited. The volume of natural resources used, as a rule, does not change on any significant scale; the fixed nature of the supply of these resources means that demand is the only effective factor determining rent.

Although for society as a whole natural resources act as a free gift of nature, from the point of view of individual users, rent payments represent costs.

For individual firms or enterprises, land has alternative options use (for example, for the cultivation of crops or for housing construction). This alternative determines to a large extent the economic behavior of the company. Return on capital economic theory names the percentage. In practice, it appears in several forms. If capital is in monetary form, then suppliers money capital receive income in the form of loan interest. If capital appears in embodied form, then its owners from the non-corporate business sector receive income in the form of property income, and corporations - in the form of corporate profits.

When determining the interest rate, one should take into account the differences between the nominal rate and the real rate, net of inflation. The real rate is the interest rate adjusted for inflation: it is equal to the nominal rate minus the inflation rate. It is the real rate that is of primary importance for making investment decisions. Interest rate distributes the available money among those industries where it will be the most productive and, therefore, the most profitable.

Entrepreneurial income (profit) comes from entrepreneurial ability, or entrepreneurship. This income is the entrepreneur’s reward for performing the following functions: combining capital, labor and natural resources into a single process of producing a product or service; making major decisions on company management; Introduction of new products, technologies; the risk relating to the invested funds - your own and those of your partners or shareholders.

Entrepreneurial income is the portion of profit remaining at the disposal of the entrepreneur after paying interest on the loan he has taken. Business income is not given value, but depends on how the entrepreneur manages.3 1.2 Income from the informal (shadow) economy Along with economic activities taking place within the legal framework, in countries with market economies and post-socialist countries there is a fairly large sector of the informal (shadow) economy.

The importance of this sector is usually higher in countries with undeveloped market mechanisms and only emerging civil society. A typical example of such a country is Russia. In countries transitioning to a market economy, income from informal economic activities plays a significant role in total income population.4 The shadow economy is a collection of unaccounted and illegal types economic activity.

The components of the shadow economy are (in relation to Russia) the fictitious economy, the illegal part of the “second” economy, the “black” economy. The basis of the fictitious economy, widespread in the USSR in the last period of the existence of the administrative-command system, were various additions, reporting violations, deviations from established standards and standards allowing for unearned income.

At that time, it was customary to understand the “second” economy as all those forms of production activity that are carried out outside the public sector - individual and small-group production. In the “second” economy there are also elements of concealment from financial and control bodies, related specifically to shadow economy. The black economy is illegal production activity, closely related to economic crime. Shadow income differs from legal income primarily in that its owner does not pay taxes.

Entrepreneurs and wage workers employed in the informal (shadow) economy do not report any mandatory information official bodies - tax, social security, employment statistics, and also avoid contacts with trade unions. 1.3 Public policy income State income policy is to redistribute income through the state budget through differentiated taxation various groups income recipients and social payments to the population.

At the same time, a significant share of national income moves from segments of the population with high incomes to segments with low incomes.5 The state, by organizing income redistribution through the budget, solves the problem of increasing incomes poor people population, creates conditions for normal reproduction work force, helps to ease social tension, etc. The degree of government influence on the process of income redistribution can be measured by the volume and dynamics of expenditures on social goals due to the central and local budgets, as well as the amount of income taxation.

The state's ability to redistribute income is largely limited budget revenues. Increasing share social spending in excess of tax revenues leads to their transformation into a powerful growth factor budget deficit and inflation. An increase in social expenditures of the state budget, even within the limits of revenues received, leads to an excessive increase in taxes, which can undermine market incentives. 2.

End of work -

This topic belongs to the section:

Income

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TOPIC: Income and its types: rent, interest, business income (profit).

Abstract plan

p.

Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

1. Income concept. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . 4.
2. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.
3. Percent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .eleven.
4. Profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13.

Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.

List of used literature. . . . . . . . . . . . . . . . . . . . . . . . . . .17.

Introduction

I chose for my essay this topic because I think it is very relevant today. After all, any activity that exists, be it working at an enterprise as a simple worker or as a broker on the stock exchange, comes down to generating income. Which, depending on its stability and volume, allows people receiving it to realize their desires. To start with the basic necessities such as food, clothing, shelter. And then the secondary ones, i.e. have a good rest, have fun in your free time.

In my work, I will try to consider the very concept of income, as well as such widely known types as rent, interest, business income (profit).

Income concept

Income is sum of money regularly and legally coming into the direct possession of the subject of market relations. It is necessary to emphasize the following points:

1. Income is usually represented by money;
2. regularity of receipt;
3. criterion of legality.

In a broad sense incomethis is a monetary assessment of the results of the activities of any entity market economy(legal and natural persons). This definition is comprehensive because it does not include among income recipients those who are already or cannot yet participate in economic activity. Whose cash income comes in the form of transfers, i.e. refunds from the budget.

Income is distinguished by source, methods, regularity and order of receipt. Income can come from ownership of factors of production, they can be received by an individual, a firm, the government in cash or non-cash form. Moreover, it can be done both regularly and once, sometimes paid in strict sequence (for example, in case of bankruptcy of an enterprise).

We can say that income makes a kind of circuit in the economy. Income goes to the family in exchange for factors of production (labor, land, capital, entrepreneurial activity). By exchanging for goods and providing services to the family, they turn into the income of those who produced these goods and offered services. Part of the funds will be used to finance economic activities, which will provide the family with income in the future. The state will also receive its share of the income. It will support the economically weak and poor, create Better conditions for the functioning of the economy as a whole. This will allow families not only to increase their incomes, but also to more generously provide funds to the budget, creating favorable conditions for the state to perform its functions, including economic ones.

There are two types of income distribution: functional and vertical. Functional distribution income is determined by the ownership of factors of production. And the vertical is generated by state intervention in the sphere of distribution and redistribution of income. As a result, a property hierarchy of income develops. In my essay I will dwell in more detail on the following types income.

Rent

Relations regarding pricing and distribution of income from the use of land, its mineral resources and real estate are called rental. In a narrow sense, economic rent refers to the price of land paid by the tenant to its owner for the possibility of productive use and profit. Rent is part of this profit and is paid by distributing it to the owner of the land. Ownership of land with its natural resources and real estate in the form of constructed structures provides the basis for obtaining a net, i.e. absolute rent, as well as income in the form of rent. Sometimes, rent includes rent if land plot leased for economic use with structures built on it. Rent stands independent form payment in which only real estate is used, i.e. structures, buildings, etc.

Let's define what income is and what types of income there are.

Income of the population is the amount of money and material goods received or produced by households over a certain period of time. The level of consumption of the population directly depends on the level of income.

Income of the population can be divided into monetary And natural.

Cash income- this is income that includes all receipts of money into the family budget in the form of wages of employees, income from business activities, pensions, scholarships, various benefits, income from property (interest on deposits, rent, dividends on securities, real estate income), royalties, etc.

Income in kind is income that includes products produced by households for their own consumption.

Income can also be classified as:

• cumulative, representing total amount monetary and income in kind by all sources of their income;
• nominal, characterizing the level of monetary income regardless of taxation and price changes;
• disposable, nominal income minus taxes and other obligatory payments, i.e., funds used by the population for consumption and savings;
• real, characterizing nominal incomes taking into account inflationary increases in prices and tariffs;
• real disposable cash income, which is determined based on cash income of the current period minus mandatory payments and taxes, adjusted for the consumer price index.

The main income of workers is wages, amounting to up to 70% of workers' income. Distinguish nominal And real wages.

Nominal wages- these are the funds that the employee receives (or which are accrued to him) in in monetary terms for your work over a certain period of time. Nominal wages are fixed at employment contract(contract) concluded between the employee and the employer.

Real wage reflects the purchasing power of cash received and represents nominal wages adjusted to the consumer price index. If the rate of increase in nominal wages is lower than the rate of increase in the level of prices for goods and services, then real wages decrease. Therefore, when increasing nominal wages, it is necessary to take into account the rise in prices, otherwise the increase in wages will not have a stimulating function.

Income distribution occurs between the owners economic factors production - labor, land, capital, entrepreneurial abilities. However, if wage-earners participate in the profits of the enterprise, then part factor income They get it too.

In addition to wages, cash income of the population includes income from business activities (profit), income from property (interest, dividends, rent), social transfers (pensions, benefits, scholarships) and other income ( insurance compensation, winnings, income received by inheritance, etc.).

The income structure of the population of the Russian Federation under a planned economy differs significantly from the income structure under market conditions management. A positive manifestation of a market economy is the growth of income from property and income from business activities, although they are received by a smaller part of the population. During the period of the planned economy of the USSR, there was a high percentage of income from wages and social payments to the population, which indicated high social protection of workers, but income from property and business activities was extremely small, since within current legislation Almost all such activities were considered illegal.

The ratio of the share of wages and social transfers in the structure of cash income of the population plays important role in motivating workers. If wages or income from business activities predominate in the structure of cash income, this indicates an increase in entrepreneurial initiative and economic independence. The trend towards an increase in social transfers in the structure of cash income can lead to a psychology of social dependency among part of the working population.

Differences in per capita income are called income differentiation. Income inequality is common to all economic system. However, as the level of socio-economic development of the country increases, income differentiation indicators decrease.

IN modern Russia The income differentiation of the population is significantly higher than in economically advanced countries and tends to further increase. This is largely due to the fact that many enterprises that were previously city-forming and often the only sources of income for many citizens turned out to be uncompetitive and closed. At the same time, a social stratum arose, living and acting according to the laws of the market, “fitting into market relations” and having immeasurably more high incomes. But as ever wider sections of the population become involved in market relations, as well as the expansion state support socially vulnerable segments of the population, the size of inequality should be reduced.

The degree of income inequality is reflected by the Lorenz curve (see figure). The x-axis shows the percentage of households, and the y-axis shows the percentage of income received. total income. The Lorenz curve represents the cumulative distribution of population and the corresponding income.

Lorenz curve: OCA - complete equality; ODA - after taxes; OEA - before taxes

Absolutely uniform distribution income (full equality) is represented in the figure by a single OCA line, which indicates that any percentage of family households receives the corresponding percentage of income. The area between the absolute equality line and the ODA Lorenz curve reflects the degree of income inequality. The wider the area, the greater the degree of income inequality.

To overcome social inequality, most countries in the world use proportional progressive income taxation. In Russia, until 2001, proportional-progressive income tax. Since 2001, personal income tax (NDFL) has been levied according to flat rate 13%. On the one hand, this, of course, is not bad, since the majority of the country’s population is still close to the poverty line, but on the other, the abolition of the proportional progressive tax contradicts the democratic principle, which states: “Whoever earns more pays more.”

Progressive taxes reduce social inequality society. This principle of justice, formulated by A. Smith, is clearly demonstrated by the depicted Lorenz curve. The figure above shows that proportionally progressive taxes make the distribution of income more equal.

In world practice, the following coefficients are used to quantify the level of income inequality:

• funds ratio- the ratio between the average income values ​​of the compared groups or their shares in total income;
• decile coefficient- the ratio between the average incomes of the 10% most affluent and the average incomes of the 10% least affluent citizens;
• population income concentration index, or Gini coefficient, varying from 0 to 1; The closer this coefficient is to one, the greater the inequality in society.