SECTION 2

ECONOMIC SECURITY

ES 1.1

MEAN (Average) FAMILY INCOME

Mean (average) income of families with children is a good starting point for assessing the economic well-being of children since it measures an average family’s ability to purchase food, shelter, clothing, child care, and other basic goods and services required to raise children. When mean family income is rising, the likelihood is that children in an average family are enjoying a rising standard of living.

However, mean family income fails to capture important economic resources that may also be available to a family, such as employer-paid health benefits, Medicaid, or food stamps. Moreover, it says nothing about changes in the distribution of income across families. For a more complete picture of children’s economic well-being, it is necessary to look at several measures of economic well-being, including those in the following sections.

Accelerating Growth in Family Income Since 1992. Between 1975 and 1992, mean income of families with children (in constant 1995 dollars)¹ grew by a very modest average annual percentage rate of 0.4 percent from $42,916 to $45,747, as shown in Figure ES 1.1.A. Between 1992 and 1995, the average annual growth rate accelerated to 3.1 percent.

Growth in Family Income by Family Type. In the past, this rise was not experienced equally across all family types. Between 1975 and 1992, female-headed families enjoyed only a modest 0.3 average annual percentage increase from $18,410 to $20,354, while married-couple families with children showed an average annual increase in average incomes of 0.9 percent, from $47,572 to $55,115.² However, this difference in growth rates reversed after 1992. Family income increased at an average annual rate of 3.4 percent for married-couple families and 3.9 percent for female-headed families.

Differences in Family Income by Family Type. There has long been a substantial gap in family income between female-headed and married-couple families, and that gap has been growing since 1975 (see Figure ES 1.1.A). In 1995, children in married-couple families enjoyed a substantial income advantage over children in female-headed families, with mean family incomes over 2.8 times as large ($60,854 versus $21,905).
As Table ES 1.1 shows, this disparity is similar within white, black, and Hispanic families with ratios ranging from 2.4 for Hispanics ($38,145 versus $15,945) to 3.0 for black families ($53,078 versus $17,645).

Differences in Mean Family Income by Race and Ethnicity. Mean family incomes are substantially higher for white families with children than for black and Hispanic families with children. Table ES 1.1 shows that, in 1995, whites enjoyed family incomes that were about 65 percent higher than black families, and 71 percent higher than Hispanic families. Among married-couple families, the white-black disparity is considerably smaller, with whites enjoying incomes that are only 16 percent higher. The disparity between whites and Hispanics remains almost as large for married-couple families, however, with white families having average incomes 61 percent higher than their Hispanic counterparts.

Since 1990, the income gap between black and white married couples with children has narrowed, while the incomes of Hispanic married couples with children have lagged behind both white and black married couples with children (see Figure ES 1.1.B). Consequently, black married-couple families earn significantly more than Hispanic married-couple families, with mean family incomes of $53,078 and $38,145, respectively, in 1995.

Among female-headed families, white families with children have an average income of $23,943 in 1995, which is 36 percent higher than that for similar black families ($17,645) and 50 percent higher than that for Hispanic families ($15,945).

Figure ES 1.1.A
Mean Family Income of Families with Children Under Age 18, 1975-1995 (in constant 1995 dollars)

Sources: unpublished tables supplied by U.S. Census Bureau.

Figure ES 1.1.B
Mean Family Income of Married Couple Families with Children Under Age 18, by Race and Ethnicity, 1990-1995 (in constant 1995 dollars)

Sources: unpublished tables supplied by U.S. Census Bureau.

Table ES 1.1 Mean Family Income of Families with Related Children Under Age 18, by Family Type (1995 Dollars^a)

		1975	1980	1985^b	1990	1991	1992^c	1993	1994	1995

All families		$42,916	$44,015	$45,191	$47,184	$45,697	$45,747	$48,355	$49,223	$50,161
	White	--	--	--	$50,029	$48,763	$49,319	$51,977	$52,796	$53,189
	Black	--	--	--	$29,942	$28,051	$27,950	$28,541	$30,584	$32,268
	Hispanic	--	--	--	$32,073	$30,759	$31,385	$31,011	$31,758	$31,039

Married-couple families		$47,572	$49,846	$52,090	$55,956	$54,534	$55,115	$58,795	$59,582	$60,854
	White	--	--	--	$56,582	$55,439	$56,428	$59,927	$60,977	$61,496
	Black	--	--	--	$46,963	$44,373	$44,625	$47,207	$48,216	$53,078
	Hispanic	--	--	--	$37,906	$36,541	$37,740	$37,712	$38,059	$38,145

Female Householder, no
husband present		$18,410	$19,555	$19,240	$20,492	$19,858	$19,519	$20,354	$21,093	$21,905
	White	--	--	--	$22,421	$22,086	$21,714	$22,608	$22,699	$23,943
	Black	--	--	--	$16,939	$15,709	$15,997	$16,026	$18,220	$17,645
	Hispanic	--	--	--	$16,668	$17,143	$16,776	$16,457	$17,421	$15,945

Notes: ^aIncome statistics converted to constant 1995 dollars using the CPI-U-X1 (all items) price index. CPI-U-X1 is a rental equivalence approach to homeowners' costs for the consumer price index prior to 1983, the first year for which the official index (CPI-U) incorpprates such a measure. ^bRecording of amounts for earnings from longest job increased to $299,999. ^cImplementation of 1990 census population controls. Source: Unpublished tables supplied by U. S. Census Bureau.

¹ In constructing income figures in constant 1995 dollars, we have followed the practice of the Bureau of the Census and used the CPI-U-X1 consumer price index. This index differs from the standard CPI-U index in its treatment of the costs of owner-occupied housing for years prior to 1986.

² If the CPI-U consumer price index had been used, the average annual growth rate for married-couple families would have been even lower, and the real income of female-headed families would have actually fallen.

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ECONOMIC SECURITY

Figure ES 1.1.A Mean Family Income of Families with Children Under Age 18, 1975-1995 (in constant 1995 dollars)

Figure ES 1.1.B Mean Family Income of Married Couple Families with Children Under Age 18, by Race and Ethnicity, 1990-1995 (in constant 1995 dollars)

Table ES 1.1 Mean Family Income of Families with Related Children Under Age 18, by Family Type (1995 Dollarsa)

Figure ES 1.1.A
Mean Family Income of Families with Children Under Age 18, 1975-1995 (in constant 1995 dollars)

Figure ES 1.1.B
Mean Family Income of Married Couple Families with Children Under Age 18, by Race and Ethnicity, 1990-1995 (in constant 1995 dollars)

Table ES 1.1
Mean Family Income of Families with Related Children Under Age 18, by Family Type (1995 Dollars^a)