over the past 45 years, the United States has experienced a rising standard of living, with real GDP per capita more than doubling between 1959 and 2004.
In contrast, living standards among some groups seem to have stagnated.
The none lderly poverty rate declined from 1959–1969, but then rose from 10.7 percent in 1970 to 12.7 percent in 1980 and remained at 12.8 percent in2003.
Figure 1 illustrates the trends in GDP per capital and poverty over this period.
Although a number of studies have documented a correlation between macroeconomicconditions and poverty,
Figure 1 makes clear that the relationship is not assimple, or as strong, as one might think.
What additional factors can explain thestarkly different trends in economic well-being that are measured by overall GDP growth and the poverty rate?