Question

Question 1, Chapter 14: Explain how your actions influence your lifetime earnings. What factors influencing lifetime earnings are outside your control? Why might two people born at the same time end up with different lifetime earnings? Did the person with the higher lifetime earnings have a better life?"

Rycroft, Robert S. 2018. Economics of Inequality, Discrimination, Poverty, and Mobility, 2^nd Ed. NY: Routledge.

Answer 1

My own actions are amount of risk taken. Usually greater the risk greater the reward. My skills-better skills mean we will get better jobs etc which fetch more earnings.. Similarly my level of education and my stress on hardwork and education determine my earnings. Lower education and hardwork fetch less earnings. GOOD food determine my physical fitness which influence my earnings positively. Better hygiene mean we loose less days of work due to disease and thus it fetches us better earnings. Similarly there are many such factors. Most important have been already mentioned above.

Many outside factors like economic situation in economy over lifetime of an individual E. G recession and boom affect one's earnings. Govt control on economy like greater taxation, Govts industrial and R&D policy etc also influences it(E. G greater tax influences negatively). Access to quality and cheap education, medical facilities, infrastructure bring more earnings. international trade environment like tariffs also effect it. Technology and knowledge level of nation, amount of capital per worker, Amount of resources available to nation and Family etc also influence earnings

Because they are subjected to different influences both internal and external E. G ndividuals born at same time might have different skills and education levels