APPENDIX H. DATA ON POVERTY MEASURING POVERTY When the Federal Government began measuring poverty in the early 1960's, the continued existence of poor people in a time of the ``Affluent Society'' seemed anomalous. Official concern soon translated into efforts to measure the size of the poverty population, and the search began for programmatic ways to alleviate poverty. The first rough estimates of the incidence of poverty were based on survey data indicating that families generally spent about one-third of their income on food. A poverty level income was then calculated by using as a yardstick the amount of money necessary to purchase the lowest cost ``nutritionally adequate'' diet calculated by the Department of Agriculture (roughly equivalent to the current Thrifty Food Plan). This price tag was multiplied by 3 to produce a poverty threshold. This procedure assumed, then, that if a family did not have enough income to buy the lowest cost nutritionally adequate diet, and twice that amount to buy other goods and services, it was ``poor.'' Adjustments were made for the size of the family, the sex of the family head, and for whether or not the family lived on a farm. Farm families were assumed to need less cash income because their needs could be met partially by farm products, particularly food. The adjustments for sex of the family head and for farm-nonfarm residence were abolished in 1981. Policy officials made one change to the basic approach for calculating the poverty threshold in 1969. The current poverty threshold is established each year simply by increasing the previous year's threshold by the change in the Consumer Price Index (CPI), rather than multiplying the cost of the Thrifty Food Plan by three. The poverty thresholds for selected years are shown in table 2. Note that the tables in this subsection provide poverty data calculated using the official Census definition of poverty. The Census definition of poverty has remained fairly standard over time and is useful for measuring progress against poverty. Under this definition, poverty is determined by comparing pretax cash income with the poverty threshold. It should be noted that the Census Bureau revised its method of estimating the poverty threshold four times--in 1966, 1974, 1979, and 1981. These revisions changed the estimate of the poverty rate. The first two revisions slightly reduced the estimated number of poor, while the more recent revisions slightly increased the number. In 1984, the Census Bureau also revised its method of imputing missing values for interest income, which slightly lowered the estimated poverty rate. Data on income and poverty after 1987 may not be comparable to data in earlier years because of changes in the methods used by the Census Bureau to process survey results. This new processing system was applied to 1987 data so that 1988 and 1987 data are comparable. Revised 1987 data are denoted as 1987R. The new processing system increased aggregate income by 0.9 percent and lowered the poverty rate for 1987 by 0.1 percent. Table H-1 shows the population, number of persons in poverty and the poverty rate in 1992 by age, race, region and family type. In 1992, 14.5 percent (36.9 million persons) of the total U.S. population lived in poverty. Of all demographic groups shown, poverty was highest among female-headed families with children (48.3 percent). Among children under age 18, nearly 22 percent, or 14.6 million children, lived in poverty in 1992; this represents an increase of over 1 million since 1990. Families with children represented a small fraction of the increase in poverty between 1991 and 1992. The increase in the number of poor individuals in families with children was 0.2 million, out of a total increase of 1.2 million. Poverty among female-headed families decreased by 0.2 million between 1991 and 1992 while poverty among married-couple families with children rose by 0.4 million. TABLE H-1.--POVERTY STATUS OF PERSONS, 1992 ---------------------------------------------------------------------------------------------------------------- Poverty Poverty Population Percent of Number of Percent of increase Percent of rate [thousands] total poor poverty from 1991 increase [percent] population [thousands] population [thousands] ---------------------------------------------------------------------------------------------------------------- Age: Under 18............. 21.9 66,834 26.3 14,617 39.6 276 23.5 18 to 64............. 11.7 156,265 61.5 18,281 49.6 696 59.4 65 and over.......... 12.9 30,870 12.2 3,983 10.8 202 17.2 -------------------------------------------------------------------------------------- Total.............. 14.5 253,969 100.0 36,880 100.0 1,172 100.0 ====================================================================================== Race: White................ 11.6 211,820 83.4 24,523 66.5 776 66.2 Black................ 33.3 31,916 12.6 10,613 28.8 371 31.7 Hispanic\1\.......... 29.3 22,720 8.9 6,655 18.0 316 27.0 Region: Northeast............ 12.3 50,655 19.9 6,227 16.9 50 4.3 Midwest.............. 13.1 60,931 24.0 7,983 21.6 -6 -.5 South................ 16.9 7,422 34.4 14,763 40.0 980 83.6 West................. 14.4 54,961 21.6 7,907 21.4 148 12.6 -------------------------------------------------------------------------------------- Total.............. 14.5 253,969 100.0 36,880 100.0 1,172 100.0 ====================================================================================== Family type: Unrelated individuals 21.8 36,734 14.5 7,991 21.7 218 18.6 Female-headed families with children............ 48.3 26,283 10.3 12,707 34.5 -200 -17 Married-couple families with children............ 9.6 107,107 42.2 10,247 27.8 427 36.4 Other families with children............ 22.9 4,598 1.8 1,054 2.9 131 11.2 All other families... 6.2 79,247 31.2 4,481 12.2 197 16.8 -------------------------------------------------------------------------------------- Total.............. 14.5 253,969 100.0 36,880 100.0 1,172 100.0 ---------------------------------------------------------------------------------------------------------------- \1\Persons of Hispanic origin may be of any race. Source: U.S. Bureau of the Census, Current Population Reports, Series P-60, No. 185, ``Poverty in the United States: 1992'' and special tabulations. TABLE H-2.--WEIGHTED AVERAGE POVERTY THRESHOLDS FOR NONFARM FAMILIES OF SPECIFIED SIZE, SELECTED YEARS, 1959-92 -------------------------------------------------------------------------------------------------------------------------------------------------------- Unrelated individuals Families of 2 or more persons -------------------------------------------------------------------------------------------------------------------- 2 persons Calendar year --------------------------------- All ages Under age Aged 65 Head Head aged 3 4 5 6 7 persons 65 or older All ages under age 65 or persons persons persons persons or more 65 older -------------------------------------------------------------------------------------------------------------------------------------------------------- 1959............................... $1,467 $1,503 $1,397 $1,894 $1,952 $1,761 $2,324 $2,973 $3,506 $3,944 $4,849 1960............................... 1,490 1,526 1,418 1,924 1,982 1,788 2,359 3,022 3,560 4,002 4,921 1965............................... 1,582 1,626 1,512 2,048 2,114 1,906 2,514 3,223 3,797 4,264 5,248 1970............................... 1,954 2,010 1,861 2,525 2,604 2,348 3,099 3,968 4,680 5,260 6,468 1975............................... 2,724 1,797 2,581 3,506 3,617 3,257 4,293 5,500 6,499 7,316 9,022 1980............................... 4,190 4,290 3,949 5,363 5,537 4,983 6,565 8,414 9,966 11,269 \1\12,761 1981............................... 4,620 4,729 4,359 5,917 6,111 5,498 7,250 9,287 11,007 12,449 \1\14,110 1982............................... 4,901 5,019 4,626 6,281 6,487 5,836 7,693 9,862 11,684 13,207 \1\15,036 1983............................... 5,061 5,180 4,775 6,483 6,697 6,023 7,938 10,178 12,049 13,630 \1\15,500 1984............................... 5,278 5,400 4,979 6,762 6,983 6,282 8,277 10,609 12,566 14,207 \1\16,096 1985............................... 5,469 5,593 5,156 6,998 7,231 6,503 8,573 10,989 13,007 14,696 \1\16,656 1986............................... 5,572 5,702 5,255 7,138 7,372 6,630 8,737 11,203 13,259 14,986 \1\17,049 1987............................... 5,778 5,909 5,447 7,397 7,641 6,872 9,056 11,611 13,737 15,509 \1\17,649 1988............................... 6,024 6,155 5,674 7,704 7,958 7,158 9,435 12,092 14,305 16,149 \1\18,248 1989............................... 6,311 6,452 5,947 8,076 8,343 7,501 9,885 12,675 14,990 16,921 \1\19,162 1990............................... 6,652 6,800 6,268 8,509 8,794 7,905 10,419 13,359 15,792 17,839 \1\20,241 1991............................... 6,932 7,086 6,532 8,865 9,165 8,241 10,860 13,924 16,456 18,587 \1\21,058 1992............................... 7,143 7,229 6,729 9,137 9,443 8,487 11,186 14,335 16,592 19,137 \1\21,594 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Poverty threshold for 7 persons, not 7 persons or more. Source: Bureau of the Census, technical papers. TRENDS IN THE OVERALL POVERTY RATE\2\ --------------------------------------------------------------------------- \2\All poverty trend information is based upon published Census Bureau data contained in Current Population Reports, Series P-60, Nos. 124, 140, 145, 149, 154, 157, 161, 166, 168, 174, 180, and 185. These figures may differ with other parts of this report which provide a more refined breakdown of this age category. Data for blacks, the aged, and nonaged population were not available for the years 1961 to 1965. --------------------------------------------------------------------------- In the late 1950s, the overall poverty rate for individuals in the United States was 22 percent, representing 39.5 million poor persons (tables 3 and 4). Between 1959 and 1969, the poverty rate declined dramatically and steadily to 12.1 percent. As a result of a sluggish economy, the rate increased slightly to 12.5 percent by 1971. In 1972 and 1973, however, it began to decrease again. The lowest rate over the entire 24- year period occurred in 1973, when the poverty rate was 11.1 percent. At that time roughly 23 million people were poor, 42 percent less than were poor in 1959. The poverty rate increased by 1975 to 12.3 percent, and then oscillated around 11.5 percent through 1979. After 1978, however, the poverty rate rose steadily reaching 15.2 percent in 1983. In 1992, the last year for which data are available, the poverty rate was 14.5 percent and 36.8 million people were poor. POVERTY RATES FOR INDIVIDUALS IN SELECTED SUBGROUPS OF THE POPULATION As table H-4 also illustrates, there are substantial differences between the overall poverty rate and the poverty rates of individuals in certain demographic subgroups. Most notably, blacks, individuals in female-headed households, and Hispanics have poverty rates that greatly exceed the average. The poverty rates for blacks and individuals in female-headed households remained above 30 percent over the 1959 through 1992 period. The poverty rate for all Hispanics has remained near 30 percent during the 1980s and early 1990s. The poverty rate for the aged, which exceeded the overall poverty rate in 1959, fell below the overall poverty rate beginning in 1982. It was 12.9 percent in 1992. The poverty rate for whites was below the overall poverty rate throughout the entire 1959-91 period. It was 11.6 percent in 1992. The poverty rate for children exceeds the average rate; it was 21.9 percent in 1992. TABLE H-3.--NUMBER OF PERSONS IN POVERTY FOR INDIVIDUALS IN SELECTED DEMOGRAPHIC GROUPS, 1959-92 ---------------------------------------------------------------------------------------------------------------- Individuals in female- Hispanic Year Overall Aged Children\1\ headed Blacks origin\3\ Whites families\2\ ---------------------------------------------------------------------------------------------------------------- Number below poverty (thousands) ---------------------------------------------------------------------------------------------------------------- 1959................................ 39,490 5,481 17,552 7,014 9,927 NA 28,484 1960................................ 39,851 NA 17,634 7,247 NA NA 28,309 1961................................ 39,628 NA 16,909 7,252 NA NA 27,890 1962................................ 38,625 NA 16,963 7,781 NA NA 26,672 1963................................ 36,436 NA 16,005 7,646 NA NA 25,238 1964................................ 36,055 NA 16,051 7,297 NA NA 24,957 1965................................ 33,185 NA 14,676 7,524 NA NA 22,496 1966................................ 28,510 5,114 12,389 6,861 8,867 NA 19,290 1967................................ 27,769 5,388 11,656 6,898 8,486 NA 18,983 1968................................ 25,389 4,632 10,954 6,990 7,616 NA 17,395 1969................................ 24,147 4,787 9,691 6,879 7,095 NA 16,659 1970................................ 25,420 4,793 10,440 7,503 7,548 NA 17,484 1971................................ 25,559 4,273 10,551 7,797 7,396 NA 17,780 1972................................ 24,460 3,738 10,284 8,114 7,710 2,414 16,203 1973................................ 22,973 3,354 9,642 8,178 7,388 2,366 15,142 1974................................ 23,370 3,085 10,156 8,462 7,182 2,575 15,736 1975................................ 25,877 3,317 11,104 8,846 7,545 2,991 17,770 1976................................ 24,975 3,313 10,273 9,029 7,595 2,783 16,713 1977................................ 24,720 3,177 10,288 9,205 7,726 2,700 16,416 1978................................ 24,497 3,233 9,931 9,269 7,625 2,607 16,259 1979................................ 26,072 3,682 10,377 9,400 8,050 2,921 17,214 1980................................ 29,272 3,871 11,543 10,120 8,579 3,491 19,699 1981................................ 31,822 3,853 12,505 11,051 9,173 3,713 21,553 1982................................ 34,398 3,751 13,647 11,701 9,697 4,301 23,517 1983................................ 35,303 3,625 13,911 12,072 9,882 4,633 23,984 1984................................ 33,700 3,330 13,420 11,831 9,490 4,806 22,955 1985................................ 33,064 3,456 13,010 11,600 8,926 5,236 22,860 1986................................ 32,370 3,477 12,876 11,944 8,983 5,117 22,183 1987................................ 32,341 3,564 12,963 12,278 9,577 5,442 21,249 1988................................ 31,745 3,481 12,455 11,972 9,356 5,357 20,715 1989................................ 31,534 3,369 12,590 11,668 9,305 5,430 20,788 1990................................ 33,585 3,658 13,431 12,578 9,837 6,006 22,326 1991................................ 35,708 3,781 14,341 13,824 10,242 6,339 23,747 1992................................ 36,880 3,983 14,617 13,716 10,613 6,655 24,523 ---------------------------------------------------------------------------------------------------------------- \1\All children including unrelated children. \2\Does not include females living alone. \3\Hispanic origin may be of any race; it is an overlapping category. NA--Not available. Source: Bureau of the Census, Current Population Reports series P-60-185. TABLE H-4.--POVERTY RATE FOR INDIVIDUALS IN SELECTED DEMOGRAPHIC GROUPS, 1959-92 ---------------------------------------------------------------------------------------------------------------- Individuals in female- Hispanic Year Overall Aged Children\1\ headed Blacks origin\3\ Whites families\2\ ---------------------------------------------------------------------------------------------------------------- 1959................................ 22.4 35.2 27.3 49.4 55.1 NA 18.1 1960................................ 22.2 NA 26.9 48.9 NA NA 17.8 1961................................ 21.9 NA 25.6 48.1 NA NA 17.4 1962................................ 21.0 NA 25.0 50.3 NA NA 16.4 1963................................ 19.5 NA 23.1 47.7 NA NA 15.3 1964................................ 19.0 NA 23.0 44.4 NA NA 14.9 1965................................ 17.3 NA 21.0 46.0 NA NA 13.3 1966................................ 14.7 28.5 17.6 39.8 41.8 NA 11.3 1967................................ 14.2 29.5 16.6 38.8 39.3 NA 11.0 1968................................ 12.8 25.0 15.6 38.7 34.7 NA 10.0 1969................................ 12.1 25.3 14.0 38.2 32.2 NA 9.5 1970................................ 12.6 24.6 15.1 38.1 33.5 NA 9.9 1971................................ 12.5 21.6 15.3 38.7 32.5 NA 9.9 1972................................ 11.9 18.6 15.1 38.2 33.3 22.8 9.0 1973................................ 11.1 16.3 14.4 37.5 31.4 21.9 8.4 1974................................ 11.2 14.6 15.4 36.5 30.3 23.0 8.6 1975................................ 12.3 15.3 17.1 37.5 31.3 26.9 9.7 1976................................ 11.8 15.0 16.0 37.3 31.1 24.7 9.1 1977................................ 11.6 14.1 16.2 36.2 31.3 22.4 8.9 1978................................ 11.4 14.0 15.9 35.6 30.6 21.6 8.7 1979................................ 11.7 15.2 16.4 34.9 31.0 21.8 9.0 1980................................ 13.0 15.7 18.3 36.7 32.5 25.7 10.2 1981................................ 14.0 15.3 20.0 38.7 34.2 26.5 11.1 1982................................ 15.0 14.6 21.9 40.6 35.6 29.9 12.0 1983................................ 15.2 13.8 22.3 40.2 35.7 28.0 12.1 1984................................ 14.4 12.4 21.5 38.4 33.8 28.4 11.5 1985................................ 14.0 12.6 20.7 37.6 31.3 29.0 11.4 1986................................ 13.6 12.4 20.5 38.3 31.1 27.3 11.0 1987................................ 13.4 12.5 20.5 38.3 32.6 28.1 10.4 1988................................ 13.0 12.0 19.5 37.2 31.3 26.7 10.1 1989................................ 12.8 11.4 19.6 35.9 30.7 26.2 10.0 1990................................ 13.5 12.2 20.6 37.2 31.9 28.1 10.7 1991................................ 14.2 12.4 21.8 39.7 32.7 28.7 11.3 1992................................ 14.5 12.9 21.9 38.5 33.3 29.3 11.6 ---------------------------------------------------------------------------------------------------------------- \1\All children including unrelated children. \2\Does not include females living alone. \3\Hispanic origin may be of any race; it is an overlapping category. NA--Not available. Source: Bureau of the Census, Technical Paper 56, table 1; Current Population Reports series P-60. CHART H-1. POVERTY RATES BY AGE: 1959-92 Source: U.S. Bureau of the Census. POVERTY RATES FOR FAMILIES\3\ --------------------------------------------------------------------------- \3\Income figures reported in this subsection were from the March 1991 Current Population Survey (CPS) computer data tape. There is a tendency in surveys, such as the CPS, for respondents to underreport their incomes by both source and amount. Reporting of income from earnings is usually more accurate than reporting of income from other sources. In general, CPS estimates of amounts or numbers of recipients of various cash and noncash transfer programs tend to be lower than administrative program totals. As a result, the data are a better reflection of general trends and patterns than of absolute numbers with income from a particular source, or the amount received. Unrelated subfamilies are included as families in this analysis. The Census Bureau excludes such families from its poverty counts. --------------------------------------------------------------------------- Table H-5 shows the composition of the poverty population for various demographic groups for selected years between 1959 and 1991. Table H-6 presents poverty data for families and unrelated individuals (individuals living alone). Female-headed families with children and unrelated individuals are more likely to be poor than other families with children or families with aged members. In 1992, 47 percent of female-headed families with children were poor, compared with 9 percent of male-present families. Although only about 7 percent of all families with an aged member were poor, 25 percent of all aged unrelated individuals were poor. About 21 percent of nonaged unrelated individuals were poor. TABLE H-5.--COMPOSITION OF POVERTY POPULATION FOR SELECTED DEMOGRAPHIC GROUPS\1\ [Percent of poverty population] -------------------------------------------------------------------------------------------------------------------------------------------------------- 1959 1966 1975 1982 1983 1985 1987 1988 1989 1990 1991 1992 -------------------------------------------------------------------------------------------------------------------------------------------------------- Aged........................................ 13.9 17.9 12.8 10.9 10.5 10.5 10.9 11.0 10.7 10.9 10.6 10.8 Children.................................... 43.6 42.6 42.1 39.2 39.0 38.8 39.4 38.7 39.4 39.5 39.5 39.1 Nonaged adults.............................. 42.5 39.5 45.1 49.9 50.5 50.7 49.7 50.3 49.9 49.7 49.9 50.1 Individuals in female-headed families\2\.... 26.3 36.0 47.4 47.5 47.4 49.5 52.6 52.9 52.4 53.4 54.0 52.7 Individuals in all other families\2\........ 73.7 64.0 52.6 52.5 52.6 50.5 47.4 47.1 47.6 46.6 46.0 47.3 Blacks...................................... 25.1 31.1 29.2 28.2 27.8 27.0 29.8 29.5 29.5 29.3 28.7 28.8 Whites...................................... 72.1 67.7 68.7 68.4 68.1 69.1 65.6 65.3 65.9 66.5 66.5 66.5 Other races................................. 2.8 1.2 2.1 3.4 4.1 3.9 4.7 5.3 4.6 4.2 4.8 4.7 Hispanic origin\3\.......................... NA NA 11.6 12.5 13.1 15.8 16.9 16.9 17.2 17.9 17.8 18.0 Individuals in families with children\4\.... NA NA NA NA NA NA NA NA 67.9 68.0 68.4 67.6 Male present............................ NA NA NA NA NA NA NA NA 31.3 30.7 30.3 30.9 Female-headed........................... NA NA NA NA NA NA NA NA 36.6 37.2 38.1 36.7 Individuals in all other families........... NA NA NA NA NA NA NA NA 32.1 32.0 31.6 32.4 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Data are for March of the following year. \2\Includes unrelated or single individuals. \3\Hispanic origin may be of any race; therefore numbers add to more than 100 percent. \4\Family includes related children under 18. NA--Not available. Note: 1987, 1988, 1989, 1990, 1991 and 1992 estimates are not comparable to prior years due to processing changes in the CPS. Source: 1959-1985 estimates based on data from ``Money Income and Poverty Status of Families and Persons in the United States 1985,'' P-60 No. 154 and No. 157. 1986-1992 data from ``March Current Population Survey.'' Table prepared by CRS. TABLE H-6.--POVERTY RATES BY FAMILY TYPE, 1987-92, AND PERCENTAGE OF FAMILIES AND UNRELATED INDIVIDUALS BY RATIO OF TOTAL INCOME TO POVERTY THRESHOLD, 1992\1\,\2\ -------------------------------------------------------------------------------------------------------------------------------------------------------- Poverty rate, 1987-92 Percentage distributions by ratio of total ------------------------------------------ income to poverty threshold, 1992 ------------------------------------------------- 1992 total 0.50 1.00 1.25 1.50 2.00 3.00 (in 1987R 1988 1989 1990 1991 1992 Under to to to to to and thousands) 0.50 0.99 1.24 1.49 1.99 2.99 over -------------------------------------------------------------------------------------------------------------------------------------------------------- Total: Families..................................... 11.0 10.8 10.6 11.1 11.8 12.1 5.1 7.0 4.1 4.3 9.1 18.2 52.2 68,852 Unrelated individuals........................ 20.4 20.6 19.2 20.7 21.1 21.8 8.2 13.6 7.7 6.4 11.8 17.9 34.6 36,734 No members age 65 or over: Families..................................... 11.9 11.6 11.5 12.2 13.0 13.1 5.8 7.3 4.0 4.0 8.3 17.0 53.6 55,706 Unrelated individuals........................ 19.1 19.3 18.1 19.1 19.6 20.6 10.1 10.5 5.5 4.9 10.1 18.3 40.6 26,693 Any member age 65 or over: Families..................................... 7.2 6.9 6.6 6.4 6.7 7.7 2.0 5.7 4.8 5.4 12.3 23.2 46.6 13,146 Unrelated individuals........................ 23.9 24.1 22.0 24.7 24.9 24.9 3.2 21.7 13.5 10.4 16.1 16.7 18.4 10,041 Families with children: Female headed family, no husband present..... 46.3 45.5 43.7 45.3 47.6 46.5 24.8 21.8 8.2 6.5 11.7 14.3 12.8 8,787 Male present families........................ 8.1 7.7 8.0 8.5 9.0 9.3 2.9 6.4 4.4 4.6 9.9 21.3 50.5 27,371 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Based on Census (``Orshansky'') poverty levels. \2\Unrelated subfamilies are treated as separate families; related subfamilies are not treated as separate families but as members of the family with whom they reside. Source: March Current Population Survey for selected years. Table prepared by CRS. POVERTY UNDER ALTERNATIVE MEASURES OF INCOME AND PRICE INFLATION The Census Bureau publishes data that reflect two adjustments in the official definition of poverty. The first of these is an alternative inflation adjustment. The official poverty line is based on a procedure developed in 1965 with yearly adjustments for inflation using the Consumer Price Index (CPI). The Consumer Price Index, in turn, is based on the yearly change in prices of goods used by most Americans. Prior to 1983, the CPI measured housing prices using a procedure that included changes in the asset value of owned homes. Because the asset value of houses was growing so much faster than the consumption value, the inflation rate that included asset values was excessive. In 1983 the Bureau of Labor Statistics began using a rental equivalence approach to measuring the value of housing. The official CPI-U inflation rate, then, is based on the asset value of housing prior to 1983 and rental equivalence in 1983 and thereafter. To provide a consistent time series, the Bureau constructed an experimental series called the CPI-U-X1 for 1967 through 1982 based on rental equivalence. The general effect of using the CPI-U-X1 is to lower inflation in past years which in turn has the effect of lowering poverty thresholds for those years. A lower threshold means that fewer people are poor. As can be seen by comparing the first two columns in table H-7, adjusting the poverty threshold using the CPI-U-X1 reduces the official poverty rate by an average of about 1.5 percentage points (or 11 percent) per year between 1979 and 1992. Using the CPI-U-X1 to adjust the poverty threshold each year from 1967 to 1992 results in 3.2 million fewer poor persons in 1992. The second adjustment in the official poverty rate made by the Census Bureau is to expand the definition of income to take into account some noncash income, including Government benefits. Under the procedures by which the official poverty rate is calculated, only cash, including Government benefits, is counted in determining whether a family is poor; income from cash welfare programs counts, but benefits from food programs, medical care, social services, education and training, and housing are not included in the calculation. Moreover, because Government spending on means-tested noncash benefits has increased more rapidly than spending on means-tested cash benefits over the years, ignoring noncash benefits may be an increasingly serious omission if we want a broad picture of the impact of Government programs on poverty. The question of how to value noncash benefits raises a variety of substantive and technical issues. The Census Bureau has been working on these issues, consulting with academic experts, sponsoring conferences, and issuing technical reports. In 1992, the Bureau published a consistent historical data series, covering the years 1979 to 1991, to trace the impact of variety of taxes and noncash benefits on poverty and income. The measurement of noncash benefits extended beyond Government spending for the poor to include Government spending programs such as Medicare that are not means-tested as well as to employer contributions to employee health plans. To examine the impact on income and poverty of various State and Federal taxes, Government noncash programs, employer- provided benefits, and so forth, the Bureau has adopted a framework that includes 15 definitions of income. By comparing income under these multiple definitions, it is possible to estimate the impact of the various income sources on the average income and the poverty rates of individuals and families. Income definition 14 is of interest to those concerned with the impact of Government means-tested, noncash benefits on poverty rates. Unlike the official poverty rate, which includes only cash Government benefits, definition 14 includes the effects of State and Federal taxes, employer-provided benefits, non-means-tested Government benefits, and means-tested noncash benefits including Food Stamps, housing, school lunch, and the fungible value of Medicaid. By comparing the official poverty rate with the definition 14 poverty rate, we can determine the impact on poverty of noncash benefits and Government taxes. The fifth column in table H-7 is the poverty rate for years 1979 through 1992 based on definition 14 and using the CPI-U-X1 deflator. Compared with the rate based on CPI-U-X1 (column 2), including taxes and noncash benefits (and a few other types of income that have little impact on poverty) in the poverty calculation reduces the poverty rate by an average of 2.8 percentage points. The combined impact of using the CPI-U-X1 and including noncash benefits can be determined by comparing the poverty rate in column 5 with the official rate in column 1. On average, the two Census Bureau adjustments reduce the poverty rate by over 4 percentage points or 30 percent across the years 1979-92 and by 4.2 percentage points or nearly 11 million persons in 1992. The question of whether or not to include medical benefits when measuring poverty has great implications on poverty rates. The valuation of medical benefits is particularly difficult. Medical coverage should not by itself raise poor individuals above the poverty line or constitute a major portion of the poverty threshold. The development of the poverty thresholds did not take into account medical costs. Although poor persons are clearly better off with medical coverage, such benefits cannot be used by recipients to meet other needs of daily living. Also, since health insurance costs are not imputed to the incomes of those above poverty, it seems inappropriate to count health benefits as income for those below the poverty line. Table H-7 illustrates that regardless of what measure of income or which price inflator is used, the trend is the same: poverty has increased substantially over the last decade. Using the official CPI-U definition, the poverty rate increased by 23.9 percent between 1979 and 1992. Using the CPI-U-X1 inflator and factoring in all noncash benefits (including health benefits), poverty has increased by 23.6 percent. Between 1979 and 1989, two peak years in the economic cycle, the increase in poverty has been smaller. Using the CPI-U-X1, the poverty rate increased by 7.5 percent over this time period. Including all noncash benefits yields a poverty increase of 12.7 percent. The relatively greater decrease in the poverty rate, according to measures that include means-tested Government benefits, suggests that Government programs benefiting the poor have not reduced poverty as much as they had in prior years. TABLE H-7.--POVERTY UNDER ALTERNATIVE MEASURES OF INCOME AND PRICE INFLATION, 1979-92 ---------------------------------------------------------------------------------------------------------------- Poverty rate Percentage reduction in ------------------------------------ official poverty associated with: Year CPI-U-X1 w/ ------------------------ Official Using CPI- noncash CPI-U-X1 w/ (CPI-U) U-X1 benefits\1\ CPI-U-X1 noncash benefits\1\ ---------------------------------------------------------------------------------------------------------------- 1979............................................... 11.7 10.6 7.9 9.4 32.5 1980............................................... 13.0 11.5 8.6 11.5 33.8 1981............................................... 14.0 12.2 9.8 12.9 30.0 1982............................................... 15.0 13.2 10.6 12.0 29.3 1983............................................... 15.2 13.7 11.0 9.9 27.6 1984............................................... 14.4 12.8 10.4 11.1 27.8 1985............................................... 14.0 12.5 10.1 10.7 27.9 1986............................................... 13.6 12.2 9.8 10.3 27.9 1987............................................... 13.4 12.0 9.5 10.4 29.1 1988............................................... 13.0 11.7 9.5 10.0 26.9 1989............................................... 12.8 11.4 8.9 10.9 30.5 1990............................................... 13.5 12.1 9.5 10.4 29.6 1991............................................... 14.2 12.7 9.9 10.6 30.3 1992............................................... 14.5 13.1 10.3 9.7 29.0 Percent change: 1979-89........................................ 9.4 7.5 12.7 NA NA 1979-92........................................ 23.9 23.6 30.4 NA NA ---------------------------------------------------------------------------------------------------------------- \1\Includes income from capital gains, health insurance supplements to wage or salary income, nonmeans-tested and means-tested government cash transfers, other means-tested government noncash transfers, the value of Medicare, the value of regulars-price school lunches, the value of Medicaid, the Earned Income Tax Credit (EITC), less Social Security payroll taxes, less Federal Income Taxes (excluding the EITC), less State income taxes. Source: U.S. Bureau of the Census, Current Population Reports, Series P-60, No. 182RD, ``Measuring the Effect of Benefits and Taxes on Income and Poverty: 1979 to 1992.'' TABLE H-8.--POVERTY RATES IN NONMETRO AND METRO AREAS, 1978-92 [Percent of persons] ------------------------------------------------------------------------ Metro --------------------- Nonmetro Central Total cities only ------------------------------------------------------------------------ 1978................................... 13.5 10.4 15.4 1979................................... 13.8 10.7 15.7 1980................................... 15.4 11.9 17.2 1981................................... 17.0 12.6 18.0 1982................................... 17.8 13.7 19.9 1983................................... 18.3 13.8 19.8 1984................................... NA NA NA 1985................................... 18.3 12.7 19.0 1986................................... 18.1 12.3 18.0 1987................................... 16.9 12.5 18.6 1989................................... 15.7 12.0 18.1 1990................................... 16.3 12.7 19.0 1991................................... 16.1 13.7 20.2 1992................................... 16.8 13.9 20.5 Percent increase, 1978-92.............. 24.4 33.7 33.1 ------------------------------------------------------------------------ NA--Not available. Source: U.S. Census Bureau, Poverty in the United States: 1992, Table 8. TABLE H-9.--PERCENT OF PERSONS IN POVERTY BY RACE, BY METRO AND NONMETRO RESIDENCE, 1992 ------------------------------------------------------------------------ Metro --------------------- Nonmetro Central Total cities only ------------------------------------------------------------------------ 1992: All races............................ 16.8 13.9 20.5 White................................ 14.2 10.7 15.6 Black................................ 40.8 31.9 35.2 Hispanic............................. 36.7 28.7 33.7 ------------------------------------------------------------------------ Source: Bureau of the Census, Poverty in the United States: 1992, Table 8. TABLE H-10.--POVERTY STATISTICS BY STATE ---------------------------------------------------------------------------------------------------------------- Poverty rate State ------------------------------------------------------------------------------- 1969\1\ 1975\2\ 1979\3\ 1983\4\ 1989\4\ 1990\4\ 1991\4\ 1992\4\ ---------------------------------------------------------------------------------------------------------------- Alabama......................... 25.4 16.4 18.9 22.9 18.9 19.2 18.8 17.1 Alaska.......................... 12.6 6.7 10.7 12.4 10.5 11.4 11.8 10.0 Arizona......................... 15.3 13.8 13.2 16.5 14.1 13.7 14.8 15.1 Arkansas........................ 26.8 18.5 19.0 21.6 18.3 19.6 17.3 17.4 California...................... 11.1 10.4 11.4 14.9 12.9 13.9 15.7 15.8 Colorado........................ 12.3 9.1 10.1 12.5 12.1 13.7 10.4 10.6 Connecticut..................... 7.2 6.7 8.0 8.7 2.9 6.0 8.6 9.4 Delaware........................ 10.9 8.2 11.8 8.5 10.0 6.9 7.5 7.6 DC.............................. 17.0 12.5 18.6 21.3 18.0 21.1 18.6 20.3 Florida......................... 16.4 14.4 13.4 14.8 12.5 14.4 15.4 15.3 Georgia......................... 20.7 18.0 16.6 18.8 15.0 15.8 17.2 17.8 Hawaii.......................... 9.3 7.9 9.9 13.4 11.3 11.0 7.7 11.0 Idaho........................... 13.2 10.3 12.6 17.3 12.4 14.9 13.9 15.0 Illinois........................ 10.2 10.5 11.0 14.4 12.7 13.7 13.5 15.3 Indiana......................... 9.7 8.1 9.7 16.1 13.7 13.0 15.7 11.7 Iowa............................ 11.6 7.9 10.1 16.7 10.3 10.4 9.6 11.3 Kansas.......................... 12.7 8.0 10.1 13.5 10.8 10.3 12.3 11.0 Kentucky........................ 22.9 17.7 17.6 18.0 16.1 17.3 18.8 19.7 Louisiana....................... 26.3 19.3 18.6 21.6 23.3 23.6 19.0 24.2 Maine........................... 13.6 12.0 13.0 12.4 10.4 13.1 14.1 13.4 Maryland........................ 10.7 7.7 9.8 8.6 9.0 9.9 9.1 11.6 Massachusetts................... 8.6 7.1 9.6 7.7 8.8 10.7 11.0 10.0 Michigan........................ 9.4 9.1 10.4 16.8 13.2 14.3 14.1 13.5 Minnesota....................... 10.7 8.3 9.5 12.3 11.2 12.0 12.9 12.8 Mississippi..................... 35.4 26.1 23.9 26.9 22.0 25.7 23.7 24.5 Missouri........................ 14.7 12.0 12.2 16.7 12.6 13.4 14.8 15.6 Montana......................... 13.4 11.5 12.3 15.1 15.6 16.3 15.4 13.7 Nebraska........................ 13.1 9.6 10.7 15.3 12.8 10.3 9.5 10.3 Nevada.......................... 9.1 8.8 8.7 9.8 10.8 9.8 11.4 14.4 New Hampshire................... 9.1 7.9 8.5 8.1 7.7 6.3 7.3 8.6 New Jersey...................... 8.1 8.1 9.5 10.9 8.2 9.2 9.7 10.0 New Mexico...................... 22.8 19.3 17.6 24.2 19.5 20.9 22.4 21.0 New York........................ 11.1 9.4 13.4 15.8 12.6 14.3 15.3 15.3 North Carolina.................. 20.3 14.7 14.8 15.9 12.2 13.0 14.5 15.7 North Dakota.................... 15.7 10.6 12.6 15.1 12.2 13.7 14.5 11.9 Ohio............................ 10.0 9.4 10.3 13.6 10.6 11.5 13.4 12.4 Oklahoma........................ 18.8 13.8 13.4 16.9 14.7 15.6 17.0 18.4 Oregon.......................... 11.5 8.9 10.7 16.4 11.2 9.2 13.5 11.3 Pennsylvania.................... 10.6 9.7 10.5 15.5 10.4 11.0 11.0 11.7 Rhode Island.................... 11.0 8.7 10.3 14.8 6.7 7.5 10.4 12.0 South Carolina.................. 23.9 17.2 16.6 20.9 17.0 16.2 16.4 18.9 South Dakota.................... 18.7 13.1 16.9 18.1 13.2 13.3 14.0 14.8 Tennessee....................... 21.8 15.8 16.4 20.1 18.4 16.9 15.5 17.0 Texas........................... 18.8 15.2 14.7 15.7 17.1 15.9 17.5 17.8 Utah............................ 11.4 8.5 10.3 13.9 8.2 8.2 12.9 9.3 Vermont......................... 12.1 13.5 12.0 15.6 8.0 10.9 12.6 10.4 Virginia........................ 15.5 10.5 11.8 11.4 10.9 11.1 9.9 9.4 Washington...................... 10.2 8.5 9.8 10.8 9.6 8.9 9.5 11.0 West Virginia................... 22.2 15.1 15.0 22.3 15.7 18.1 17.9 22.3 Wisconsin....................... 9.8 7.7 8.7 10.6 8.4 9.3 9.9 10.8 Wyoming......................... 11.7 8.7 7.9 12.7 10.9 11.0 9.9 10.3 ---------------------------------------------------------------------------------------------------------------- \1\U.S. Bureau of the Census, Statistical Abstract of the United States: 1979, table 764, pp. 465 (110th edition), Washington, D.C. 1979, 1969 estimates are from the 1970 census. \2\Data are also from the 1979 Statistical Abstract of the United States, but estimates are from the Survey of Income and Education. \3\U.S. Bureau of the Census, Statistical Abstract of the United States: 1982-83, table 732, p. 443. (103d edition). Washington, D.C. 1982. 1979 estimates are from the 1980 census. \4\U.S. Department of Commerce, Bureau of the Census. ``Poverty in the United States: 1992.'' Series P-60, No. 181. ANTIPOVERTY EFFECTIVENESS OF VARIOUS CASH AND NEARCASH INCOME SOURCES The following tables provide estimates of the number and percentage of individuals removed from poverty by different social insurance programs (e.g., Social Security, Unemployment Compensation and Workers Compensation), means-tested cash and nearcash programs (e.g., Aid to Families With Dependent Children, Supplemental Security Income, General Assistance, Food Stamps, Housing, and School Lunch programs) and Federal payroll and income taxes. The analysis allows comparisons between 1979 and 1989 (peaks of economic cycles); 1979 to 1983 (peak of an economic cycle to a year when poverty was at its peak); and 1989 to 1992 (peak of an economic cycle to the latest year data are available). METHODOLOGY One way of measuring the antipoverty effectiveness of various income sources is to estimate the number of persons who would be counted as poor if a particular source of income were not received. Subtracting from this number the actual number of persons that are counted as poor after accounting for the effects of the income source provides an estimate of the number of people lifted out of poverty by that particular income source. For example, the effect of Social Security upon poverty can be seen by comparing the number who would be counted as poor if they did not receive Social Security with the number of poor remaining after Social Security income is counted. A second way of assessing the effectiveness of various income sources upon poverty is to estimate the degree to which those sources reduce the gap between a poor family's income and the poverty threshold. This concept is known as the ``poverty gap'' or the ``poverty income deficit.'' A cash transfer program which is highly targeted toward the poor may appear to do little to eliminate poverty--that is, to reduce the number who are counted as poor--but such a program may still have a very real impact by reducing the degree of poverty as measured by the poverty gap. The number of persons who would be counted as poor (or the degree to which the poverty gap expands) if a particular governmental source of income were not received overstates the magnitude of the effect upon poverty because the methodology fails to account for any work disincentives that may be associated with that particular program. However, the analysis comparing different years does give reliable estimates of how a given program's antipoverty effectiveness changes over time. There are also several reasons why the analysis does not capture all the changes in antipoverty effectiveness. The Census Bureau has noted that for many different reasons there is a tendency in household surveys for respondents to underreport their income. In addition, Federal law requires AFDC families to assign their child support rights to the State. While child support payments ought to be counted as private income, because they are administered by the State, recipients probably do not distinguish between AFDC benefit payments and child support payments. Therefore, the effect of governmental programs is slightly overstated as private income may appear to be a government benefit. At the same time, the decline in the effectiveness of governmental benefits in reducing poverty over time is probably slightly understated because AFDC child support payments have increased from $597 million in 1979 to $2.0 billion in 1991. Further, in 1979, the Comprehensive Employment and Training Act (CETA) spent some $5 billion on public service employment jobs. This program was terminated by 1983. These expenditures of monies and their antipoverty effects are not reflected in the analysis as a change in governmental policy. All valuations of in-kind transfers are those estimated by the Bureau of the Census using a market-based valuation technique. The market value generally attempts to measure the private market cost of benefits provided in-kind. Food stamps are assigned their value, while school lunches are assigned the average amount of Federal subsidy per child. Housing assistance is valued as the difference between the estimated market rent (based on the American Housing Survey) and the reduced rent paid by subsidized households. In this analysis, poverty is measured under five or six different income concepts. ``Cash income before transfers'' is all cash income prior to any governmental benefits or taxes (also referred to as ``private cash income''). ``Plus social insurance'' adds to cash income all benefits from social insurance programs such as Workers' Compensation and Unemployment Compensation, as well as all benefits from the Social Security programs. On some of the tables, the Social Security program is separated from other social insurance programs. ``Plus means-tested cash transfers'' adds to cash income and social insurance all means-tested transfer income such as Aid to Families with Dependent Children, Supplemental Security Income, Veteran's pensions and General Assistance. ``Plus food and housing benefits'' adds to cash, social insurance and means-tested cash income all means-tested in-kind transfers received for food and housing. These would include food stamps, housing programs and school lunch programs. ``Less Federal taxes'' subtracts from income all Federal income taxes and the employee portion of Federal payroll taxes. CHANGES IN POVERTY SINCE THE 1990-91 RECESSION Total population As a result of the 1990-91 economic recession, gross domestic product in 1987 dollars bottomed out at $4,821 billion in 1991. In 1992, the economy recovered to its 1990 level of $4,878 billion and began an expansion which has continued well into 1994. This section examines the impact of the economic recovery and expansion on poverty as of 1992, the latest year for which data are available. As the economy fell into recession, the official rate of poverty rose from 12.8 percent in 1989 to 13.5 percent in 1990 and 14.2 percent in 1991. With the first full year of economic recovery and expansion, the rate of increase in poverty slowed dramatically to what is likely to be a cyclical peak of 14.5 percent. With continued economic expansion in 1993, the rate of poverty for 1993, which will be available late in 1994, is likely to be down from 14.5 percent. Overall, the population grew by 1.1 percent in 1992 to nearly 253 million. Reflecting the lagging effects of the recession, the poverty population, before accounting for Federal income transfers and taxes, grew by 4.3 percent to over 57 million. After accounting for income transfers and taxes, the poverty population was still over 33 million, which was a 4.2 percent increase over 1991. The proportion of individuals removed from poverty by Federal income transfers and taxes in 1992 remained unchanged from 1991 at 41.9 percent. Nearly three-fourths of this poverty reduction was due to social insurance programs and over one- fourth was attributable to means-tested welfare benefits. Poverty was increased by nearly one percent or 438,000 persons because of taxes, but with the large increase in the earned income tax credit enacted in 1993, this impact is likely to diminish when data for 1994 and subsequent years become available. In contrast to the 4.3 percent rise in the poverty population, before accounting for Federal income transfers and taxes, the corresponding poverty gap jumped by 5.4 percent from 1991 to 1992 to over $169 billion. After accounting for taxes and transfers, the increase in the poverty gap was 6.8 percent at about $55 billion. While the poverty population was reduced by only 41.9 percent, the poverty gap was cut by 67.3 percent. Two-thirds of the reduction in the poverty gap stemmed from social insurance programs while one-third derived from means- tested welfare programs. Taxes had the minor effect of increasing the poverty gap by only 0.3 percent. Without Federal income transfers and taxes, the poverty rate would have been 22.5 percent in 1992 compared to 21.8 percent in 1991. Social insurance programs reduced the 1992 poverty rate to 15.6 percent. Means-tested welfare programs reduced the poverty rate further to 14.5 percent, and when food and housing benefits were factored in, the poverty rate dropped to 12.9 percent. Federal taxes raised this rate to 13.0 percent. Single-parent families In 1992, there were over 32 million persons in single- parent families with related children under 18 years old. Nearly 17 million of these families or 51.5 percent of them were poor. After Federal taxes and transfers, about 12.5 million were still poor. Seventy percent of this reduction in poverty was due to means-tested welfare programs. None of these figures changed substantially from 1991. The poverty gap before Federal transfers and taxes for single-parent families was $44.6 billion in 1992, up 2.8 percent from 1991. Federal transfers and taxes reduced this gap by 61.6 percent to about $17 billion in 1992. Eighty percent of this reduction was attributable to means-tested welfare programs. Without Federal transfers and taxes, the poverty rate for single-parent families would have been 51.5 percent. After factoring in Federal transfers and tax benefits, the poverty rate of single-parent families fell to 38.5 percent. Persons in housing units with all members 65 years old and older Before Federal transfers and taxes, about 13 million elderly persons in these households were poor. After including Federal transfers and taxes, only 2.7 million elderly persons in these households were poor. Ninety-three percent of this reduction in poverty is due to social insurance. Federal taxes had virtually no impact. There was little change in these figures from 1991. The poverty gap before Federal transfers and taxes for these elderly persons was nearly $52 billion in 1992. After Federal transfers and taxes, the poverty gap was reduced to only $4.5 billion. Ninety-five percent of this reduction was due to social insurance programs. There was little change in these figures from 1991. The poverty rate before Federal transfers and taxes for these elderly would have been 57 percent. After Federal transfers and taxes, the poverty rate was only 11.8 percent. There was little change in these figures from 1991. TABLE H-11.--ANTIPOVERTY EFFECTIVENESS OF CASH AND NEARCASH TRANSFERS (INCLUDING FEDERAL INCOME AND PAYROLL TAXES) FOR ALL PERSONS ---------------------------------------------------------------------------------------------------------------- 1979 1983 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Total population (thousands).................. 222,893 231,140 246,492 248,054 251,179 253,969 Number of poor individuals (thousands): Cash income before transfers.............. 42,783 52,700 49,052 50,851 54,679 57,021 Plus social insurance (other than Social Security)................................ 40,867 49,468 47,377 49,052 52,164 54,367 Plus Social Security...................... 28,604 36,928 33,825 35,928 38,131 39,717 Plus means-tested cash transfers.......... 25,924 35,030 31,534 33,585 35,708 36,880 Plus food and housing benefits............ 21,546 31,697 27,642 29,377 31,129 32,680 Less Federal taxes........................ 22,215 33,923 28,941 30,465 31,770 33,118 ================================================================= Number of individuals removed from poverty due to (thousands): Social insurance (other than Social Security)................................ 1,916 3,232 1,675 1,799 2,515 2,654 Social insurance (including Social Security)................................ 14,179 15,772 15,227 14,923 16,548 17,304 Means-tested cash, food, and housing benefits................................. 7,058 5,231 6,183 6,551 7,002 7,037 Federal taxes............................. -669 -2,226 -1,299 -1,088 -641 -438 ----------------------------------------------------------------- Total................................... 20,568 18,777 20,111 20,386 22,909 23,903 ================================================================= Percent of poor individuals removed from poverty due to: Social insurance (including Social Security)................................ 33.1 29.9 31.0 29.3 30.3 30.3 Means-tested cash, food, and housing benefits................................. 16.5 9.9 12.6 12.9 12.8 12.3 Federal taxes............................. -1.6 -4.2 -2.6 -2.1 -1.2 -.8 ----------------------------------------------------------------- Total................................... 48.1 35.6 41.0 40.1 41.9 41.9 ================================================================= Poverty gap (millions of 1991 dollars): Cash income before transfers.............. 122,875 151,930 143,907 149,149 160,355 169,050 Plus social insurance (other than Social Security)................................ 114,537 139,817 137,082 141,845 150,704 158,534 Plus Social Security...................... 63,624 85,642 79,050 84,527 91,123 94,317 Plus means-tested cash transfers.......... 44,235 63,821 58,978 62,991 67,920 71,693 Plus food and housing benefits............ 34,630 50,846 45,631 47,630 51,161 54,814 Less Federal taxes........................ 35,176 52,739 46,583 48,630 51,734 55,250 Percent reduction in the poverty gap due to: Social insurance (including Social Security)................................ 48.2 43.6 45.1 43.3 43.2 44.2 Means-tested cash, food and housing benefits................................. 23.2 22.9 23.2 24.7 24.9 23.4 Federal taxes............................. -0.4 -1.2 -0.7 -0.7 -0.4 -0.3 ----------------------------------------------------------------- Total................................... 70.9 65.3 67.6 67.4 67.7 67.3 ================================================================= Poverty rate (in percent): Cash income before transfers.............. 19.2 22.8 19.9 20.5 21.8 22.5 Plus social insurance (other than Social Security)................................ 18.3 21.4 19.3 19.7 20.8 21.4 Plus Social Security...................... 12.8 15.9 13.8 14.4 15.2 15.6 Plus means-tested cash transfers.......... 11.6 15.1 12.8 13.5 14.2 14.5 Plus food and housing benefits............ 9.7 13.7 11.2 11.8 12.4 12.9 Less Federal taxes........................ 10.0 14.6 11.8 12.3 12.6 13.0 ----------------------------------------------------------------- Total reduction in poverty rate......... 9.2 8.2 8.1 8.2 9.2 9.5 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office. TABLE H-12.--ANTIPOVERTY EFFECTIVENESS OF CASH AND NEARCASH TRANSFERS (INCLUDING FEDERAL INCOME AND PAYROLL TAXES) FOR INDIVIDUALS IN SINGLE-PARENT FAMILIES WITH RELATED CHILDREN UNDER AGE 18 ---------------------------------------------------------------------------------------------------------------- 1979 1983 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Total population (thousands).................. 23,547 25,559 29,260 30,525 31,733 32,381 Number of poor individuals (thousands): Cash income before transfers.............. 11,786 13,751 14,074 15,110 16,387 16,679 Plus social insurance (other than Social Security)................................ 11,568 13,501 13,820 14,841 16,061 16,361 Plus Social Security...................... 10,645 12,611 13,040 14,203 15,290 15,600 Plus means-tested cash transfers.......... 9,491 12,063 12,388 13,324 14,573 14,647 Plus food and housing benefits............ 7,115 10,531 10,636 11,313 12,452 12,661 Less Federal taxes........................ 7,141 10,800 10,648 11,234 12,263 12,461 ================================================================= Number of individuals removed from poverty due to (thousands): Social insurance (other than Social Security)................................ 218 250 254 269 326 318 Social insurance (including Social Security)................................ 1,141 1,140 1,034 907 1,097 1,079 Means-tested cash, food, and housing benefits................................. 3,530 2,080 2,404 2,890 2,838 2,939 Federal taxes............................. -26 -269 -12 79 189 200 ----------------------------------------------------------------- Total................................... 4,645 2,951 3,426 3,876 4,124 4,218 ================================================================= Percent of poor individuals removed from poverty due to: Social insurance (including Social Security)................................ 9.7 8.3 7.3 6.0 6.7 6.5 Means-tested cash, food, and housing benefits................................. 30.0 15.1 17.1 19.1 17.3 17.6 Federal taxes............................. -0.2 -2.0 -0.1 0.5 1.2 1.2 ----------------------------------------------------------------- Total................................... 39.4 21.5 24.3 25.7 25.2 25.3 ================================================================= Poverty gap (millions of 1991 dollars): Cash income before transfers.............. 30,003 37,790 37,189 40,081 43,363 44,599 Plus social insurance (other than Social Security)................................ 29,154 36,398 36,387 39,015 41,948 43,017 Plus Social Security...................... 25,747 32,804 33,011 35,968 38,913 39,581 Plus means-tested cash transfers.......... 14,856 21,552 22,593 24,418 26,659 27,982 Plus food and housing benefits............ 9,219 14,006 14,391 14,761 16,029 17,547 ================================================================= Less Federal taxes........................ 9,153 14,095 14,221 14,588 15,643 17,106 ================================================================= Percent reduction in the poverty gap due to: Social insurance (including Social Security)................................ 14.2 13.2 11.2 10.3 10.3 11.3 Means-tested cash, food and housing benefits................................. 55.1 49.7 50.1 52.9 52.8 49.4 Federal taxes............................. 0.2 -0.2 0.5 0.4 0.9 1.0 ----------------------------------------------------------------- Total................................... 69.5 62.7 61.8 63.6 63.9 61.6 ================================================================= Poverty rate (in percent): Cash income before transfers.............. 50.1 53.8 48.1 49.5 51.6 51.5 Plus social insurance (other than Social Security)................................ 49.1 52.8 47.2 48.6 50.6 50.5 Plus Social Security...................... 45.2 49.3 44.6 46.6 48.2 48.2 Plus means-tested cash transfers.......... 40.3 47.2 42.3 43.7 45.9 45.2 Plus food and housing benefits............ 30.2 41.2 36.4 37.1 39.2 39.1 Less Federal taxes........................ 30.3 42.2 36.4 36.8 38.6 38.5 ----------------------------------------------------------------- Total reduction in poverty rate......... 19.8 11.6 11.7 12.7 13.0 13.0 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office. TABLE H-13.--ANTIPOVERTY EFFECTIVENESS OF CASH AND NEARCASH TRANSFERS (INCLUDING FEDERAL INCOME AND PAYROLL TAXES) FOR ALL INDIVIDUALS IN MARRIED-COUPLE FAMILIES WITH RELATED CHILDREN UNDER AGE 18 ---------------------------------------------------------------------------------------------------------------- 1979 1983 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Total population (thousands).................. 109,888 106,182 105,876 106,092 106,058 107,241 Number of poor individuals (thousands): Cash income before transfers.............. 10,302 15,184 11,117 11,564 12,454 13,071 Plus social insurance (other than Social Security)................................ 9,538 13,447 10,521 10,918 11,510 12,047 Plus Social Security...................... 8,453 12,644 9,665 10,191 10,617 11,092 Plus means-tested cash transfers.......... 7,785 12,183 9,019 9,507 9,846 10,291 Plus food and housing benefits............ 6,528 11,205 7,813 8,412 8,628 9,127 Less Federal taxes........................ 6,867 12,620 8,515 8,693 8,827 9,167 ================================================================= Number of individuals removed from poverty due to (thousands): Social insurance (other than Social Security)................................ 764 1,737 596 646 944 1,024 Social insurance (including Social Security)................................ 1,849 2,540 1,452 1,373 1,837 1,979 Means-tested cash, food, and housing benefits................................. 1,925 1,439 1,852 1,779 1,989 1,965 Federal taxes............................. -339 -1,415 -702 -281 -199 -40 ----------------------------------------------------------------- Total................................... 3,435 2,564 2,602 2,871 3,627 3,904 ================================================================= Percent of poor individuals removed from poverty due to: Social insurance (including Social Security)................................ 17.9 16.7 13.1 11.9 14.8 15.1 Means-tested cash, food, and housing benefits................................. 18.7 9.5 16.7 15.4 16.0 15.0 Federal taxes............................. -3.3 -9.3 -6.3 -2.4 -1.6 -.3 ----------------------------------------------------------------- Total................................... 33.3 16.9 23.4 24.8 29.1 29.9 ================================================================= Poverty gap (millions of 1991 dollars): Cash income before transfers.............. 16,425 25,497 17,366 17,991 20,544 21,382 Plus social insurance (other than Social Security)................................ 14,637 21,570 15,685 16,283 18,168 18,906 Plus Social Security...................... 11,600 18,936 13,034 14,091 15,672 16,035 Plus means-tested cash transfers.......... 9,228 15,150 10,123 10,836 12,395 12,563 Plus food and housing benefits............ 6,994 11,895 7,568 8,184 9,300 9,374 Less Federal taxes........................ 7,045 12,705 7,676 8,249 9,076 9,065 ================================================================= Percent reduction in the poverty gap due to: Social Insurance (including Social Security)................................ 29.4 25.7 24.9 21.7 23.7 25.0 Means-tested cash, food, and housing benefits................................. 28.0 27.6 31.5 32.8 31.0 31.2 Federal taxes............................. -0.3 -3.2 -0.6 -0.4 1.1 1.4 ----------------------------------------------------------------- Total................................... 57.1 50.2 55.8 54.2 55.8 57.6 ================================================================= Poverty rate (in percent): Cash income before transfers.............. 9.4 14.3 10.5 10.9 11.7 12.2 Plus social insurance (other than Social Security)................................ 8.7 12.7 9.9 10.3 10.9 11.2 Plus Social Security...................... 7.7 11.9 9.1 9.6 10.0 10.3 Plus means-tested cash transfers.......... 7.7 11.5 8.5 8.9 9.3 9.6 Plus food and housing benefits............ 5.9 10.5 7.4 7.9 8.1 8.5 Less Federal taxes........................ 6.2 11.9 8.0 8.4 8.3 8.5 ----------------------------------------------------------------- Total reduction in poverty rate......... 3.2 2.4 2.5 2.5 3.4 3.7 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office. TABLE H-14.--ANTIPOVERTY EFFECTIVENESS OF CASH AND NEARCASH TRANSFERS (INCLUDING FEDERAL INCOME AND PAYROLL TAXES) FOR ALL INDIVIDUALS IN FAMILIES WITH RELATED CHILDREN UNDER AGE 18\1\ ---------------------------------------------------------------------------------------------------------------- 1979 1983 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Total population (thousands).................. 133,435 132,123 135,430 136,790 137,791 139,622 Number of poor individuals (thousands): Cash income before transfers.............. 22,088 28,935 25,190 26,674 28,841 29,751 Plus social insurance (other than Social Security)................................ 21,106 26,948 24,341 25,759 27,570 28,408 Plus Social Security...................... 19,098 25,255 22,704 24,394 25,906 26,691 Plus means-tested cash transfers.......... 17,276 24,246 21,408 22,832 24,419 24,939 Plus food and housing benefits............ 13,642 21,736 18,449 19,725 21,080 21,788 Less Federal taxes........................ 14,008 23,420 19,163 20,197 21,090 21,627 ================================================================= Number of individuals removed from poverty due to (thousands): Social insurance (other than Social Security)................................ 982 1,987 849 915 1,271 1,343 Social insurance (including Social Security)................................ 2,990 3,680 2,486 2,280 2,935 3,060 Means-tested cash, food, and housing benefits................................. 5,456 3,519 4,255 4,669 4,826 4,903 Federal taxes............................. -366 -1684 -714 -472 -10 161 ----------------------------------------------------------------- Total................................... 8,080 5,515 6,027 6,477 7,751 8,124 ================================================================= Percent of poor individuals removed from poverty due to: Social insurance (including Social Security)................................ 13.5 12.7 9.9 8.5 10.2 10.3 Means-tested cash, food, and housing benefits................................. 24.7 12.2 16.9 17.5 16.7 16.5 Federal taxes............................. -1.7 -5.8 -2.8 -1.8 0.0 .5 ----------------------------------------------------------------- Total................................... 36.6 19.1 23.9 24.3 26.9 27.3 ================================================================= Poverty gap (millions of 1991 dollars): Cash income before transfers.............. 46,428 63,286 54,553 58,072 63,907 65,980 Plus social insurance (other than Social Security)................................ 43,788 57,968 52,071 55,298 60,116 61,922 Plus Social Security...................... 37,346 51,739 46,044 50,059 54,586 55,616 Plus means-tested cash transfers.......... 24,085 36,702 32,717 35,254 39,054 40,545 Plus food and housing benefits............ 16,213 25,901 21,959 22,945 25,329 26,920 Less Federal taxes........................ 16,198 26,800 21,896 22,836 24,719 26,171 ================================================================= Percent reduction in the poverty gap due to: Social insurance (including Social Security)................................ 19.6 18.2 15.6 13.8 14.6 15.7 Means-tested cash, food and housing benefits................................. 45.5 40.8 44.2 46.7 45.8 43.5 Federal taxes............................. 0.0 -1.4 0.1 0.2 1.0 1.1 ----------------------------------------------------------------- Total................................... 65.1 57.7 59.9 60.7 61.3 60.3 ================================================================= Poverty rate (in percent): Cash income before transfers.............. 16.6 21.9 18.6 19.5 20.9 21.3 Plus social insurance (other than Social Security)................................ 15.8 20.4 18.0 18.8 20.0 20.3 Plus Social Security...................... 14.3 19.2 16.8 17.8 18.8 19.1 Plus means-tested cash transfers.......... 12.9 18.4 15.8 16.7 17.7 17.9 Plus food and housing benefits............ 10.2 16.5 13.6 14.4 15.3 15.6 Less Federal taxes........................ 10.5 17.8 14.2 14.8 15.3 15.5 ----------------------------------------------------------------- Total reduction in poverty rate......... 6.1 4.1 4.4 4.7 5.6 5.8 ---------------------------------------------------------------------------------------------------------------- \1\This table is a summation of female-headed and married-couple families with children. Source: Congressional Budget Office. TABLE H-15.--ANTIPOVERTY EFFECTIVENESS OF CASH AND NEARCASH TRANSFERS (INCLUDING FEDERAL INCOME AND PAYROLL TAXES) FOR INDIVIDUALS IN UNITS WITH ALL MEMBERS AGE 65 OR OLDER ---------------------------------------------------------------------------------------------------------------- 1979 1983 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Total population (thousands).................. 17,623 19,294 21,805 22,209 22,812 22,940 Number of poor individuals (thousands): Cash income before transfers.............. 10,564 10,843 11,971 11,904 12,551 13,073 Plus social insurance (other than Social Security)................................ 10,344 10,654 11,806 11,733 12,298 12,798 Plus Social Security...................... 3,361 3,231 3,138 3,253 3,404 3,512 Plus means-tested cash transfers.......... 3,008 2,928 2,810 3,038 3,157 3,239 Plus food and housing benefits............ 2,635 2,520 2,335 2,452 2,498 2,712 Less Federal taxes........................ 2,641 2,533 2,354 2,458 2,505 2,715 ================================================================= Number of individuals removed from poverty due to (thousands): Social insurance (other than Social Security)................................ 220 189 165 171 253 275 Social insurance (including Social Security)................................ 7,203 7,612 8,833 8,651 9,147 9,561 Means-tested cash, food, and housing benefits................................. 726 711 803 801 906 800 Federal taxes............................. -6 -13 -19 -6 -7 -3 ----------------------------------------------------------------- Total................................... 7,923 8,310 9,617 9,446 10,046 10,358 ================================================================= Percent of poor individuals removed from poverty due to: Social insurance (including Social Security)................................ 68.2 70.2 73.8 72.7 72.9 73.1 Means-tested cash, food, and housing benefits................................. 6.9 6.6 6.7 6.7 7.2 6.1 Federal taxes............................. -0.1 -0.1 -0.2 -0.1 -0.1 0.0 ----------------------------------------------------------------- Total................................... 75.0 76.6 80.3 79.4 80.0 79.2 ================================================================= Poverty gap (millions of 1991 dollars): Cash income before transfers.............. 41,873 43,678 47,473 47,453 50,015 51,932 Plus social insurance (other than Social Security)................................ 39,890 42,106 46,083 46,268 48,471 50,238 Plus Social Security...................... 7,166 6,814 6,505 6,788 7,560 7,054 Plus means-tested cash transfers.......... 4,773 4,470 4,563 5,056 5,423 5,396 Plus food and housing benefits............ 4,114 3,887 3,766 4,105 4,515 4,527 Less Federal taxes........................ 4,125 3,901 3,780 4,117 4,533 4,539 ================================================================= Percent reduction in the poverty gap due to: Social insurance (including Social Security)................................ 82.9 84.4 86.3 85.7 84.9 86.4 Means-tested cash, food and housing benefits................................. 7.3 6.7 5.8 5.7 6.1 4.9 Federal taxes............................. 0.0 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------------------- Total................................... 90.1 91.1 92.0 91.3 90.9 91.3 ================================================================= Poverty rate (in percent): Cash income before transfers.............. 59.9 56.2 54.9 53.6 55.0 57.0 Plus social insurance (other than Social Security)................................ 58.7 55.3 54.1 52.8 53.9 55.8 Plus Social Security...................... 19.1 16.8 14.4 14.7 14.9 15.3 Plus means-tested cash transfers.......... 17.1 15.2 12.9 13.7 13.8 14.1 Plus food and housing benefits............ 15.0 13.1 10.7 11.0 11.0 11.8 Less Federal taxes........................ 15.0 13.1 10.8 11.1 11.0 11.8 ----------------------------------------------------------------- Total reduction in poverty rate......... 44.9 43.1 44.1 42.5 44.0 45.2 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office. TRENDS IN FAMILY INCOMES, 1967-92 In the past 25 years, the level of and inequality among family incomes has changed significantly according to all income measures. Between 1967 and 1973, income increased for all quintiles, and income inequality went down. As measured by the Congressional Budget Office, over this time period, the lowest quintile experienced an increase in mean adjusted family income (family income divided by the poverty threshold for the appropriate family size) of 30 percent, while income for the highest quintile grew by 21 percent. Since, 1973, however, the trend has been markedly different. Income of the bottom quintile has declined, while the income for the highest quintile has risen. While the general trends in families' economic well-being are similar regardless of how measured, varying results for the distribution of family incomes are obtained depending on which income measure is used. Three commonly used income measures (all adjusted for inflation) are family cash income, family cash income per capita, and adjusted family income. While no measure perfectly captures the economic well-being of families, adjusted family income most accurately accounts for differences in family size by incorporating the scale implicit in the official Federal poverty thresholds. Family composition in the United States has undergone pronounced changes over the past two decades, as the number of families grew twice as fast as the population between 1973 and 1989.\7\ The growth in families overall reflects very different trends among particular types of families. The number of married couples with children, for example, fell almost 2 percent between 1973 and 1989. In contrast, the number of families headed by a single mother grew over 70 percent during the same period. --------------------------------------------------------------------------- \7\In contrast to some measures of income from the Bureau of the Census, this analysis treats unrelated individuals as one-person families. Family types are defined in detail below. --------------------------------------------------------------------------- Changes in family composition are also reflected in the number of persons and earners per family. The average family has become smaller, reflecting in part relatively fewer families with children (and fewer children in those families). The average family also had fewer earners in 1989 than in 1973. Total family cash income grew over 50 percent in real terms between 1973 and 1989, before falling slightly as the recession that began in 1990 took hold. The real income of the average family rose during this period as well, but the magnitude and timing of the increase depends on the income measure used. For example, family cash income rose about 9 percent between 1973 and 1989, on average, with virtually all of the increase taking place between 1979 and 1989. In contrast, average pretax adjusted family income (AFI)--which takes into account changes in family size--rose about 20 percent, with the annual increase about equally divided between the two time periods shown. The larger increase in AFI reflects in part a decrease in average family size. TABLE H-16.--CHANGES IN POPULATION, FAMILY COMPOSITION, AND INCOME, 1973, 1979, 1989, AND 1992 ---------------------------------------------------------------------------------------------------------------- Percent change 1973 1979 1989 1992 ----------------------------- 1973-89 1979-89 1989-92 ---------------------------------------------------------------------------------------------------------------- A. Distribution of families and persons by family type Number of families (in thousands)......... 73,166 84,229 101,663 105,460 38.9 20.7 3.7 --------------------------------------------------------------------- Families with children................ 31,098 32,166 34,768 36,158 11.8 8.1 4.0 Married couples with children..... 24,798 24,166 24,378 24,640 -1.7 .9 1.1 Single mothers with children...... 4,126 5,650 7,123 8,041 72.6 26.1 12.9 Nonelderly childless units\1\......... 28,183 35,730 46,467 48,270 64.9 30.1 3.9 Elderly childless units\2\............ 13,884 16,331 20,428 21,032 47.1 25.1 3.0 ===================================================================== Number of persons in different family types (in thousands)..................... 207,525 217,718 245,846 253,843 18.5 12.9 3.3 --------------------------------------------------------------------- Families with children................ 134,248 130,426 135,381 139,622 .8 3.8 3.1 Married couples with children..... 108,976 101,318 99,471 100,533 -8.7 -1.8 1.1 Single mothers with children...... 14,240 18,132 21,504 24,159 51.0 18.6 12.3 Nonelderly childless units\1\......... 50,148 60,514 77,025 79,496 53.6 27.3 3.2 Elderly childless units\2\............ 23,129 26,778 33,440 34,725 44.6 24.9 3.8 ===================================================================== B. Size, age composition, and number of earners for all families Average number of persons per family: Total............................... 2.87 2.59 2.40 2.41 -16.4 -7.3 0.5 --------------------------------------------------------------------- Under 18.............................. .94 .75 .64 0.63 -31.9 -14.7 -1.7 18 to 64.............................. 1.64 1.55 1.47 1.49 -10.1 -5.2 1.3 65 and older.......................... .30 .28 .29 0.29 -1.9 3.6 .09 ===================================================================== Average number of earners per family: Total............................... 1.39 1.34 1.29 1.29 -6.9 -3.7 -0.2 --------------------------------------------------------------------- Male earners.......................... .81 .75 .69 0.69 -15.3 -8.0 0.2 Female earners........................ .57 .59 .60 0.60 5.2 1.7 -0.7 ===================================================================== C. Income trends for all families, by income measure Income measure (in 1989 dollars): Total family cash income (billions)... 2,220 2,591 3,353 3,272 51.0 29.4 -2.4 Mean family cash income............... 30,341 30,764 32,978 31,022 8.7 7.2 -5.9 Mean family cash income per capita\3\. 10,718 11,922 13,743 12,888 28.2 15.3 -6.2 Adjusted pretax income\4\............. 19,096 20,592 23,025 21,776 20.6 11.8 -5.4 Adjusted posttax income\5\............ NA 17,404 19,424 18,502 NA 11.6 -4.7 High adult male earner............ NA 12,044 12,189 11,128 NA 1.2 -8.7 High adult female earner.......... NA 4,111 5,633 5,758 NA 37.0 2.2 Other earners in family........... NA 923 894 718 NA -3.1 -19.7 Other private income.............. NA 2,021 2,700 2,471 NA 33.6 -8.5 Cash transfer income (non-means- tested).......................... NA 1,190 1,429 1,492 NA 20.0 4.4 Cash transfer income (means- tested).......................... NA 302 180 197 NA -40.4 9.7 Noncash transfer income........... NA 145 139 170 NA -4.0 21.8 Taxes............................. NA -3,333 -3,740 (3,431) NA 12.2 -8.3 ---------------------------------------------------------------------------------------------------------------- \1\Families in which both the head and spouse are under age 65 and there are no children under 18, and unrelated individuals under age 65. \2\Families in which either the head or spouse of head is 65 or older and there are no children under 18, and unrelated individuals 65 and older. \3\Family cash income divided by the number of persons in the family. \4\Pretax AFI (adjusted family income) is pretax family income divided by the poverty threshold. Thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the number of children. In this table only, pretax AFI is expressed in dollars by multiplying adjusted family income by the 1-person poverty threshold. \5\Posttax AFI (adjusted family income) is posttax family income, plus the cash value of noncash food and housing benefits, divided by the poverty threshold. Thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the number of children. In this table only, posttax AFI is expressed in dollars by multiplying adjusted family income by the 1-person poverty threshold. NA-Not available. Source: Congressional Budget Office based on CPS data. Definitions and methods Analyzing trends in the distribution of family incomes over time requires making decisions about a number of variables: How should variation in incomes be measured? What is the appropriate timeframe over which to look at changes? How should inflation be taken into account? And, finally, what is the appropriate measure of income to use? Measuring variation. Most of the data in this section are presented for income quintiles, each of which represents one- fifth of the income distribution (either families or persons, as indicated). Quintiles are calculated by ordering all relevant family units from that with the lowest income to that with the highest. For the analysis of changes in incomes among different types of families, quintiles are defined separately for each family type. The analysis of changes in the distribution of family incomes over time is done by looking at average incomes, adjusted for inflation, by income quintile for specific types of families. Timeframe. Most of the analysis focuses on data for 4 years: 1967, 1973, 1979, and 1989. These years reflect peaks in the business cycle, and allow comparisons to be made in a consistent fashion that holds constant general economic conditions. Data are also shown for 1992, the most recent year for which data are available. Adjustment for inflation. To examine changes in family income over time, the dollar amounts must be adjusted for inflation to compare actual buying power. Adjustment for inflation is done here using the CPI-U-X1, a revised version of the official Consumer Price Index that provides a consistent treatment of the costs of homeownership over the years examined. The CPI-U-X1 is an index of the cost of a market basket of goods and services representing the average consumption of the urban population.\8\ --------------------------------------------------------------------------- \8\The official CPI is viewed by many analysts as having overstated the growth in housing costs during the late 1970s. Prior to 1983, the housing component of the CPI reflected both the flow of services and the investment aspects of homeownership; only the former is appropriate in an index measuring consumption costs. Since 1983, the Bureau of Labor Statistics (BLS) has used a rental- equivalence measure incorporating the consumption aspects of owning a home, not the investment aspects. The CPI-U-X1 series is used to calculate what the CPI would be had the rental-equivalence measure been in place since 1967. The BLS recommends using the CPI-U-X1 when a consistent treatment of homeowner costs is desired. See Bureau of Census; ``Money Income of Households, Families, and Persons in the United States: 1991,'' Current Population Reports, Series P-60, No. 180 Appendices A and B. --------------------------------------------------------------------------- Income measure. The purpose of looking at the distribution of family incomes over time is to analyze changes in family economic well-being. Two important issues in choosing an appropriate income measure are how to adjust for differences in family size and what to include as income. One measure, used extensively by the Bureau of the Census, is real family cash income, which is the sum of wage, salary, and self-employment earnings, private pension and retirement income, interest and dividends, and government cash transfers received by each family member. By this measure, which takes inflation into account, but not changes in family size, noncash transfers, or taxes, the average income of all families increased 8.7 percent between 1973 and 1989, with most of the growth occurring between 1979 and 1989 (see A of table H-17). Family cash income also shows quite different trends among income quintiles: the average income of the lowest quintile fell 3.2 percent between 1973 and 1989, where as the average income of the highest quintile rose 17.1 percent. Family cash income has several shortcomings as a measure of changes in economic well-being. Most notably, it fails to take into account changes in family size and composition: a family of one--i.e., a person living alone--with $30,000 in income is treated as being as well off as a family of four with $30,000 in income. This assumption is inappropriate, however, as a family of four requires more income to attain the same standard of living as a single person. An alternative approach is to measure income on a per capita basis, by dividing total family income by the number of persons in the family. Using family cash income per capita yields quite different results (see C of table H-17). The growth in average per capita income among all families between 1973 and 1989 is much larger than the growth in average family cash income: 28.2 percent, compared with 8.7 percent. Moreover, average cash income per capita rose for each quintile between 1973 and 1989, whereas average family cash income rose only for the top two quintiles. These results reflect a decline in family size between 1973 and 1989. In contrast to family cash income, which completely ignores differences in family size, using per capita family income as a measure of well-being assumes that a family of four requires exactly four times as much as a single person to attain the same standard of living. But four persons living together would generally require less than four times as much income because of the economies of scale reaped from increased family size. (For example, families with more children might require more bedrooms, but not more kitchens.) A measure that reflects such economies of scale would therefore provide a better method of taking family size into account. TABLE H-17.--ALTERNATIVE MEASURES OF FAMILY INCOME, BY INCOME QUINTILE AND CHANGE OVER TIME, 1973, 1979, 1989, AND 1992 FOR ALL FAMILIES [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- Percent change Quintile 1967 1973 1979 1989 1992 ----------------------------- 1973-89 1979-89 1989-92 ---------------------------------------------------------------------------------------------------------------- I. Pre-Tax Cash Income A. Mean family cash income (family weighted): Lowest........................ NA 6,061 5,994 5,866 5,256 -3.2 -2.1 -10.4 Second........................ NA 15,416 15,306 15,107 13,885 -2.0 -1.3 -8.1 Middle........................ NA 25,909 25,609 25,823 24,118 -.3 .8 -6.6 Fourth........................ NA 37,946 38,680 40,374 38,367 6.4 4.4 -5.0 Highest....................... NA 66,364 68,230 77,716 73,487 17.1 13.9 -5.4 ----------------------------------------------------------------------------- Total....................... NA 30,341 30,764 32,978 31,022 8.7 7.2 -5.9 B. Mean adjusted family income (person weighted):\1\ Lowest........................ .69 .90 .90 .86 0.77 -4.3 -4.3 -10.4 Second........................ 1.54 1.94 2.06 2.09 1.95 7.7 1.3 -6.7 Middle........................ 2.26 2.82 3.07 3.27 3.10 16.0 6.7 -5.2 Fourth........................ 3.16 3.94 4.32 4.77 4.55 20.9 10.5 -4.5 Highest....................... 5.67 6.87 7.39 8.84 8.36 28.7 19.6 -5.4 ----------------------------------------------------------------------------- Total....................... 2.66 3.29 3.55 3.97 3.75 20.4 11.8 -5.5 C. Mean family income per capita (person weighted):\2\ Lowest........................ NA 2,795 2,912 2,822 2,504 1.0 -3.1 -11.3 Second........................ NA 5,906 6,535 6,872 6,384 16.4 5.2 -7.1 Middle........................ NA 8,628 9,713 10,723 10,134 24.3 10.4 -5.5 Fourth........................ NA 12,386 14,046 16,058 15,145 29.6 14.3 -5.7 Highest....................... NA 23,875 26,405 32,237 30,274 35.0 22.1 -6.1 ----------------------------------------------------------------------------- Total....................... NA 10,718 11,922 13,743 12,888 28.2 15.3 -6.2 D. Mean adjusted family income (post-tax income plus food and housing benefits) (person weighted):\1\ Lowest........................ NA NA .96 .93 .88 N/A -2.1 -6.4 Second........................ NA NA 1.89 1.90 1.80 N/A 0.5 -5.2 Middle........................ NA NA 2.67 2.84 2.71 N/A 6.4 -4.6 Fourth........................ NA NA 3.63 4.01 3.85 N/A 10.6 -3.9 Highest....................... NA NA 5.85 7.04 6.69 N/A 20.4 -5.0 ----------------------------------------------------------------------------- Total....................... NA NA 3.00 3.35 3.19 N/A 11.6 -4.8 ---------------------------------------------------------------------------------------------------------------- \1\Family income divided by the poverty threshold. Thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the number of children. \2\Total family income divided by the number of persons in the family. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, and 1993. Analysts disagree over the best method of making incomes comparable for families of different size, but one readily available candidate is the scale implicit in the official Federal poverty thresholds. This scale assumes, for example, that a family of four needs about twice as much income as a single person to attain an equivalent standard of living (see table H-18). The equivalence scale implicit in the poverty thresholds may not perfectly capture the disparate needs of families of different sizes, but it probably yields a better assessment of relative economic well-being than making no adjustment (mean family cash income) or assuming no economies of scale (mean family cash income per capita). TABLE H-18.--POVERTY THRESHOLDS AND EQUIVALENCE VALUES FOR DIFFERENT FAMILY SIZES, 1992 ------------------------------------------------------------------------ Official Adjusted Equivalence poverty poverty value (one threshold threshold person=1.00) ------------------------------------------------------------------------ Family size (persons): 1........................... $7,143 $6,572 1.00 2........................... 9,137 8,407 1.28 3........................... 11,186 10,292 1.57 4........................... 14,335 13,190 2.01 5........................... 16,592 15,266 2.32 6........................... 19,137 17,608 2.68 7........................... 21,594 19,869 3.02 8........................... 24,053 22,131 3.37 9 or more................... 28,745 26,449 4.02 ------------------------------------------------------------------------ Note.--Poverty thresholds shown for 1- and 2-person families are a weighted average of the separate official thresholds for elderly and non-elderly individuals and families. Adjusted poverty thresholds are computed using the CPI-U-X1 (1967 equals 100) to adjust for inflation. The official poverty threshold is adjusted for inflation using the CPI. Source: Congressional Budget Office. CHART H-2. CHANGES IN POSTTAX ADJUSTED FAMILY INCOME BY QUINTILE, 1979-89 The adjusted family income (AFI) measure shown in B of table H-17 incorporates the equivalence scale underlying the poverty thresholds. Each family's pretax cash income is divided by its poverty threshold, yielding family income as a multiple of poverty. Thus, for example, the average family in the middle quintile in 1989 had an income of 3.27 times its poverty threshold.\9\ --------------------------------------------------------------------------- \9\Poverty thresholds for 1- and 2-person families in this section do not vary by the age of the family head. The 1989 weighted averages are adjusted for inflation using the CPI-U-X1. --------------------------------------------------------------------------- Adjusting for family size in this way yields results that are generally intermediate to those obtained for the family cash income and family cash income per capita measures. Between 1967 and 1973, income increased significantly for all quintiles, by 30 percent for the lowest quintile. On average, pretax AFI increased 20.4 percent between 1973 and 1989, with a 4.3 percent decline for the lowest quintile and a 28.7 percent increase for the highest quintile. Also like the other measures, average pretax AFI declined for the lowest quintile between 1979 and 1989 and rose for the highest quintile. It must be remembered that there is no adjustment in these analyses for labor inputs. For example, if mean income increases by 10 percent over a given time period while family work hours also increase by 10 percent, the family's overall economic well-being may be qualitatively different than a 10- percent increase in income would suggest. For example, work expenses may have increased by an even larger amount, particularly if more family members are working, and leisure time would have decreased. Adjusting for noncash income and taxes. A family's economic well-being is determined not only by its pretax cash income, but also by the amount of any noncash income it receives. Analyses that ignore noncash benefits--whether received from employers in the form of fringe benefits or through social welfare transfer programs--understate how well-off families are. The understatement has grown over time, moreover, because in-kind income has increased as a share of personal income. Employer-provided benefits increased from about 7 percent of wages and salaries in 1973 to 10 percent in 1989. Adjusted for inflation and population growth, spending on the major government noncash transfer programs--food stamps, public housing, Medicare, and Medicaid--almost tripled over the same period. Whereas the omission of noncash income understates economic well-being for most families, pretax measures of income overstate it. Both income and payroll taxes reduce disposable income, so that posttax income provides a better measure of the resources available to families at any point in time. Taking taxes into account is especially important for assessing income trends over time because Social Security tax rates increased by almost 30 percent, and the amount of annual earnings subject to the tax increased by nearly 70 percent in real terms between 1973 and 1989. And although individual income taxes as a share of income have been relatively constant, the share varies widely across income quintiles. The income measure shown in D of table H-17 shows posttax AFI, plus the estimated cash value of food and housing benefits, for 1979, 1989, and 1992.\10\ Food benefits reflect the value of food stamps and school lunches; housing benefits reflect subsidized public housing; and taxes include Federal income and payroll taxes, but not State income taxes. Being more comprehensive, posttax AFI is a better indicator of economic well-being than pretax AFI, and is used extensively in this study.\11\ --------------------------------------------------------------------------- \10\Data on noncash transfers are available only for 1979 and later years, as the Bureau of the Census did not collect this information until then. Similar information about the value of Medicaid and Medicare is also available, but the family-level data needed to allocate employer-provided health insurance benefits are not. The value of Medicaid and Medicare benefits is therefore excluded to avoid skewing the distribution of income toward low-income families. \11\Unless stated otherwise, posttax AFI always includes the cash value of noncash food and housing benefits. --------------------------------------------------------------------------- The growth in average posttax AFI between 1979 and 1989 is generally similar to the growth in pretax AFI, both for families overall and for each income quintile. The most notable difference between the two measures is in their levels: average posttax AFI was about 8 percent higher than average pretax AFI for the lowest quintile in 1989, but about 20 percent lower for the highest quintile. The difference in the two measures reflects the addition of food and housing benefits to the incomes of families in the lowest quintile and the subtraction of taxes from incomes of families in the highest quintile. Income shares. Another way of tracking income trends is to look at changes in the percentage share of income received by families in each quintile. Income shares measure whether families have gained or lost in relative terms. That is, a given quintile may receive a smaller share of real income even as its average income has increased. All four income measures show broadly similar trends in the share of income received by each quintile (see table H-19). Between 1973 and 1989, the shares of each of the lowest three quintiles fell, and the share of the top quintile rose. The measures show different patterns of shares at any point in time, however. In 1989, for example, the share of the top quintile was 47.1 percent when measured as family cash income, compared with 42.1 percent when measured as posttax AFI. TABLE H-19.--SHARES OF FAMILY INCOME, BY INCOME QUINTILE FOR SELECTED YEARS, 1967-92 FOR ALL FAMILIES [In percent] ------------------------------------------------------------------------ Quintile 1967 1973 1979 1989 1992 ------------------------------------------------------------------------ I. Pretax Cash Income A. Mean family cash income (family weighted): Lowest...................... NA 4.0 3.9 3.6 3.4 Second...................... NA 10.2 10.0 9.2 9.0 Middle...................... NA 17.1 16.6 15.7 15.5 Fourth...................... NA 25.0 25.1 24.5 24.7 Highest..................... NA 43.7 44.4 47.1 47.4 B. Adjusted family income (AFI) (person weighted):\1\ Lowest...................... 5.2 5.5 5.1 4.3 4.1 Second...................... 11.6 11.8 11.6 10.5 10.4 Middle...................... 16.9 17.1 17.3 16.5 16.6 Fourth...................... 23.7 23.9 24.3 24.0 24.3 Highest..................... 42.6 41.7 41.7 44.6 44.6 C. Family cash income per capita (person weighted):\2\ Lowest...................... NA 5.2 4.9 4.1 3.9 Second...................... NA 11.0 11.0 10.0 9.9 Middle...................... NA 16.1 16.3 15.6 15.7 Fourth...................... NA 23.1 23.6 23.4 23.5 Highest..................... NA 44.6 44.3 46.9 47.0 II. Posttax Income Plus Food and Housing Benefits D. Adjusted family income (AFI) (person weighted):\1\ Lowest...................... NA NA 6.4 5.6 5.5 Second...................... NA NA 12.6 11.4 11.3 Middle...................... NA NA 17.8 17.0 17.0 Fourth...................... NA NA 24.2 24.0 24.2 Highest..................... NA NA 39.0 42.1 42.0 ------------------------------------------------------------------------ \1\Family income divided by the poverty threshold. Thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the number of children. \2\Total family income divided by the number of persons in the family. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, and 1993. CHART H-3. RATIO OF AVERAGE ADJUSTED FAMILY INCOME OF HIGHEST QUINTILE TO AVERAGE INCOME OF LOWEST QUINTILE, 1967-92 Year Note: Data available only for points shown. Source: Congressional Budget Office. Calculations and chart done by committee staff. TRENDS IN PRETAX CASH INCOMES BY TYPE OF FAMILY The composition of the typical family has changed over time. Compared with 1973 and 1979, there were fewer persons in each family in 1989, on average, and married couples with children made up a smaller fraction of all families. (See table H-20.) Additional insights can therefore be gained by looking at changes in incomes for specific family types. This analysis distinguishes seven types of family units: --Married couples with children, which are families composed of a married couple living only with their own or related children, at least one of whom is under age 18; --Single mothers with children, which are families composed of unmarried, divorced, separated, or widowed mothers living only with their own or related children, at least one of whom is under age 18; --Other families with children, which are all other families with at least one related child under age 18; --Nonelderly childless families, which are families composed of two or more related people living together, in which the family head and the spouse of the head are both under age 65 and there are no children under age 18; --Nonelderly unrelated individuals, which are people over age 17 and under age 65 who are not living with relatives; --Elderly childless families, which are families composed of two or more related people living together, in which either the family head or the spouse of the head is 65 or older and there are no children under age 18; --Elderly unrelated individuals, which are people 65 or older who are not living with relatives. In addition, results are also presented for four aggregates: --All families with children, which comprises married couples, single mothers, and other families with children; --Nonelderly childless units, which comprises nonelderly childless families and nonelderly unrelated individuals; --Elderly childless units, which comprises elderly childless families and elderly unrelated individuals; --All families, which comprises all families and unrelated individuals (i.e., the noninstitutional U.S. population). Unless otherwise noted, the analysis of changes in income for each family type listed above is based on quintiles computed for that family type. This procedure permits comparisons within, but not across, family types; the quintile in which a particular family is found says nothing about its place among all families, but measures its position in relation to families of the same type. (For example, individuals in the middle quintile of single mothers with children may be in the lowest quintile of the all-families grouping.) Comparisons over time show how the incomes of families of a given type compare with similar families at another time, not how incomes have changed for a particular type of family. Families may move among income quintiles as their incomes--or the incomes of other families--rise or fall; they may also change types as their members grow older, have children, marry, or divorce. In addition, the average number of members and earners within a given type of family may change over time, as may the characteristics of those persons. TABLE H-20.--AVERAGE FAMILY SIZE AND NUMBER OF FAMILIES,\1\ BY FAMILY TYPE, WEIGHTED BY FAMILIES, 1973, 1979, 1989 AND 1992 ------------------------------------------------------------------------ Number of Family type and year Persons per families Percent of family (thousands) families ------------------------------------------------------------------------ All families:\1\ 1973......................... 2.84 73,166 100.0 1979......................... 2.59 84,229 100.0 1989......................... 2.42 101,663 100.0 1992......................... 2.41 105,460 100.0 -------------------------------------- All families with children: 1973......................... 4.35 31,098 42.5 1979......................... 4.09 32,166 38.2 1989......................... 3.89 34,768 34.2 1992......................... 3.89 36,158 34.3 -------------------------------------- Married couples with children: 1973......................... 4.42 24,798 33.9 1979......................... 4.23 24,166 28.7 1989......................... 4.08 24,378 24.0 1992......................... 4.08 24,640 23.4 -------------------------------------- Single mothers with children: 1973......................... 3.50 4,126 5.6 1979......................... 3.24 5,650 6.7 1989......................... 3.02 7,123 7.0 1992......................... 3.00 8,041 7.6 -------------------------------------- Nonelderly childless units: 1973......................... 1.76 28,183 38.5 1979......................... 1.68 35,730 42.4 1989......................... 1.66 46,467 45.7 1992......................... 1.65 48,270 45.8 -------------------------------------- Nonelderly childless families: 1973......................... 2.32 16,363 22.4 1979......................... 2.35 17,931 21.3 1989......................... 2.44 21,257 20.9 1992......................... 2.44 21,704 20.6 -------------------------------------- Nonelderly unrelated individuals: 1973......................... 1.00 11,820 16.2 1979......................... 1.00 17,799 21.1 1989......................... 1.00 25,210 24.8 1992......................... 1.00 26,567 25.2 -------------------------------------- Elderly childless units: 1973......................... 1.64 13,884 19.0 1979......................... 1.62 16,331 19.4 1989......................... 1.64 20,428 20.1 1992......................... 1.65 21,032 19.9 -------------------------------------- Elderly childless families: 1973......................... 2.17 7,590 10.4 1979......................... 2.16 8,676 10.3 1989......................... 2.23 10,600 10.4 1992......................... 2.25 10,990 10.4 -------------------------------------- Elderly unrelated individuals: 1973......................... 1.00 6,294 8.6 1979......................... 1.00 7,655 9.1 1989......................... 1.00 9,828 9.7 1992......................... 1.00 10,041 9.5 ------------------------------------------------------------------------ \1\ Corresponds more closely to census definition of household. Includes families of one person. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990 and 1993. Pretax AFI Trends in incomes for different family types show more variation than trends for families overall. Between 1973 and 1989, adjusted family income grew 14.9 percent, on average, for families with children (see table H-21). This compares with an income gain of 20.4 percent for all families. Average AFI fell 16.1 percent during this period for the lowest quintile, from 88 percent of poverty to 74 percent of poverty. For the highest quintile, average AFI rose 25.6 percent, compared with 28.7 percent for all families. Must of the divergence in incomes among families with children reflects compositional change, as families of single mothers with children became increasingly common. The lowest quintile of married couples with children has a 1.1 percent decline in average AFI between 1973 and 1989; the lowest quintile of single mothers with children fared much worse, with a 23.4 percent decline during the same period. These two family types as a whole, however, showed income gains: 20.6 percent for married couples with children and 16.9 percent for single mothers with children. TABLE H-21.--AVERAGE PRETAX AFI (INCOME AS A MULTIPLE OF POVERTY) BY FAMILY TYPE AND INCOME QUINTILE, WEIGHTED BY PERSONS, 1967, 1973, 1979, 1989, AND 1992 ---------------------------------------------------------------------------------------------------------------- Percent change Family type and 1967 1973 1979 1989 1992 --------------------------------------- quintile 1967-89 1973-89 1979-89 1989-92 ---------------------------------------------------------------------------------------------------------------- All families: Lowest............ 0.69 0.90 0.90 0.86 0.77 25.1 -4.3 -4.3 -10.4 Second............ 1.54 1.94 2.06 2.09 1.95 35.5 7.7 1.3 -6.7 Middle............ 2.26 2.82 3.07 3.27 3.10 45.2 16.0 6.7 -5.2 Fourth............ 3.16 3.94 4.32 4.77 4.55 50.8 20.9 10.5 -4.5 Highest........... 5.67 6.87 7.39 8.84 8.36 56.0 28.7 19.6 -5.4 ----------------------------------------------------------------------------------------- Total........... 2.66 3.29 3.55 3.97 3.75 49.0 20.4 11.8 -5.5 ========================================================================================= All families with children: Lowest............ .74 .88 .84 .74 .65 .1 -16.1 -11.9 -12.2 Second............ 1.54 1.88 1.95 1.87 1.72 21.6 -.7 -4.2 -7.8 Middle............ 2.13 2.65 2.84 2.93 2.77 37.4 10.8 3.3 -5.5 Fourth............ 2.84 3.54 3.85 4.14 4.00 45.5 16.9 7.6 -3.4 Highest........... 4.77 5.73 6.15 7.20 6.86 50.9 25.6 17.1 -4.7 ----------------------------------------------------------------------------------------- Total........... 2.40 2.94 3.13 3.38 3.20 40.4 14.9 8.0 -5.2 ========================================================================================= Married couples with children: Lowest............ .89 1.16 1.18 1.14 1.07 27.9 -1.1 -2.9 -6.6 Second............ 1.66 2.12 2.29 2.34 2.25 40.9 10.1 2.2 -3.8 Middle............ 2.23 2.84 3.12 3.34 3.26 49.9 17.8 7.1 -2.6 Fourth............ 2.93 3.71 4.11 4.52 4.43 54.2 21.9 10.2 -2.0 Highest........... 4.88 5.94 6.41 7.67 7.36 57.3 29.2 19.8 -4.1 ----------------------------------------------------------------------------------------- Total........... 2.52 3.15 3.42 3.80 3.67 51.1 20.6 11.2 -3.5 ========================================================================================= Single mothers with children: Lowest............ .21 .33 .32 .25 0.23 18.6 -23.4 -22.9 -9.2 Second............ .59 .71 .75 .64 .58 9.3 -9.2 -13.8 -10.0 Middle............ .91 1.03 1.22 1.14 1.06 26.0 10.7 -6.1 -7.3 Fourth............ 1.45 1.67 2.01 2.03 1.89 39.9 21.5 .6 -6.8 Highest........... 2.78 3.29 3.65 4.14 3.81 49.2 26.0 13.5 -8.2 ----------------------------------------------------------------------------------------- Total........... 1.19 1.41 1.59 1.64 1.51 38.5 16.9 3.2 -7.9 ========================================================================================= Nonelderly childless units: Lowest............ .80 1.22 1.24 1.19 1.07 49.3 -1.8 -3.9 -10.5 Second............ 2.19 2.81 2.91 2.94 2.75 34.0 4.5 .9 -6.6 Middle............ 3.28 4.09 4.27 4.45 4.24 35.6 8.9 4.2 -4.7 Fourth............ 4.47 5.49 5.78 6.29 6.00 40.8 14.5 8.8 -4.6 Highest........... 7.42 8.95 9.35 10.94 10.38 47.4 22.3 17.1 -5.2 ----------------------------------------------------------------------------------------- Total........... 3.63 4.51 4.71 5.16 4.89 42.1 14.4 9.6 -5.3 ========================================================================================= Nonelderly childless families: Lowest............ 1.03 1.74 1.85 1.80 1.71 74.2 3.5 -2.8 -4.9 Second............ 2.47 3.31 3.59 3.68 3.55 49.1 11.1 2.5 -3.4 Middle............ 3.52 4.53 4.89 5.20 5.03 48.0 15.0 6.3 -3.4 Fourth............ 4.70 5.88 6.33 7.03 6.77 49.6 19.5 11.1 -3.7 Highest........... 7.65 9.33 9.94 11.72 11.19 53.3 25.7 17.9 -4.6 ----------------------------------------------------------------------------------------- Total........... 3.87 4.96 5.32 5.89 5.65 52.0 18.8 10.7 -4.0 Nonelderly unrelated individuals: Lowest............ .32 .51 .61 .61 .51 90.4 19.4 -.4 -16.4 Second............ 1.14 1.49 1.72 1.83 1.63 61.1 23.1 6.4 -11.3 Middle............ 2.12 2.53 2.78 3.00 2.74 41.5 18.8 8.0 -8.7 Fourth............ 3.23 3.82 4.03 4.46 4.15 37.9 16.9 10.6 -7.0 Highest........... 5.88 7.00 7.11 8.48 7.83 44.3 21.2 19.3 -7.7 ----------------------------------------------------------------------------------------- Total........... 2.54 3.07 3.25 3.68 3.37 44.9 19.9 13.1 -8.4 ========================================================================================= Elderly childless units: Lowest............ .48 .76 .84 .95 .90 96.8 24.7 13.4 -6.1 Second............ .95 1.34 1.50 1.73 1.69 82.6 28.6 14.8 -2.0 Middle............ 1.48 1.97 2.26 2.64 2.52 78.1 34.1 16.9 -4.4 Fourth............ 2.40 3.02 3.38 4.02 3.73 67.3 33.2 19.1 -7.4 Highest........... 5.32 6.54 6.85 8.63 7.86 62.1 32.0 26.0 -8.9 ----------------------------------------------------------------------------------------- Total........... 2.13 2.73 2.97 3.59 3.34 68.9 31.8 21.2 -7.1 ========================================================================================= Elderly childless families: Lowest............ .60 .96 1.06 1.20 1.13 100.2 25.3 13.5 -5.7 Second............ 1.16 1.63 1.86 2.15 2.09 85.9 31.5 15.2 -2.8 Middle............ 1.77 2.34 2.67 3.14 2.97 77.6 34.0 17.4 -5.3 Fourth............ 2.76 3.50 3.83 4.61 4.20 67.2 31.8 20.3 -8.9 Highest........... 5.73 7.12 7.37 9.54 8.58 66.7 34.0 29.4 -10.1 ----------------------------------------------------------------------------------------- Total........... 2.40 3.11 3.36 4.13 3.79 72.0 32.7 22.9 -8.1 ========================================================================================= Elderly unrelated individuals: Lowest............ .35 .54 .64 .73 .70 109.0 35.7 13.6 -4.0 Second............ .63 .93 1.02 1.17 1.12 86.1 26.1 14.7 -4.5 Middle............ .86 1.23 1.37 1.62 1.59 88.9 32.2 18.2 -2.4 Fourth............ 1.29 1.73 2.05 2.46 2.32 91.2 42.1 20.2 -5.8 Highest........... 3.44 4.08 4.83 5.58 5.41 62.3 36.8 15.5 -3.1 ----------------------------------------------------------------------------------------- Total........... 1.31 1.70 1.98 2.31 2.23 76.3 36.0 16.7 -3.8 ---------------------------------------------------------------------------------------------------------------- Note: Poverty thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the number of children. Quintiles are based on the number of persons. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, and 1993. Elderly persons experienced income gains across the board between 1973 and 1989. For elderly childless units, which include both single persons and married couples, average AFI rose 24.7 percent for the lowest quintile and 32.0 percent for the highest quintile. Despite their gains, the elderly generally had much lower incomes than the nonelderly. In 1989, for example, the average income of elderly childless units was about 3.6 times poverty; the average income of nonelderly childless units, by comparison, was about 5.2 times poverty. The effects of differences in rates of growth in incomes by quintile show up directly in data on income shares. The share of total family income received by families in the lowest quintile declined, while the share received by the highest quintile increased between 1973 and 1989 (see table H-22). Average family cash income For all families, average cash income grew more slowly than average pre-tax AFI between 1973 and 1989. This was also generally true for specific family types. At the same time, those groups of families whose average cash incomes declined, had more pronounced decreases than occurred in pretax AFI. Average family cash income grew 5.8 percent for families with children between 1973 and 1989, with most of the growth taking place between 1979 and 1989 (see table H-23). The average for the lowest quintile fell 26.7 percent during the 1973 to 1989 period, while the average for the highest quintile rose 16.4 percent. As with pretax AFI, compositional change is important for interpreting changes in incomes among families with children. The 5.5 percent decrease in average family cash income for the lowest quintile of married couples with children was much smaller than the 26.9 percent decline for single mothers with children. Because the change in family size among elderly persons was almost negligible over the period, their trend in average family cash incomes is almost identical to the trend in average pretax AFI. Elderly childless units, which comprise married couples and unrelated individuals, experienced income gains in every quintile between 1973 and 1989. In percentage terms, average family cash income increased slightly less among nonelderly childless units between 1973 and 1989 than did pretax AFI: 10.4 percent, compared with 14.4 percent. Among both nonelderly childless families and individuals separately, average family cash income increased for every quintile between 1973 and 1989. Table H-24 shows family cash income limits (the income cutoffs between quintiles) by quintile and family type. Between 1973 and 1992, income limits among families with children have declined or grown slowly while those for the elderly have increased, in some cases significantly. Across all family types, income limits among the higher quintiles have increased more than among the lower quintiles. For most family types, the share of average family cash income received by the highest quintile is slightly higher than that quintile's share of pretax AFI (see table H-25). The trend in these shares between 1973 and 1989, and between 1979 and 1989 is generally similar. Income trends year by year Tables H-26 and H-27 show average pretax AFI and average family cash income by type of family and income quintile for selected years before 1979 and all years thereafter. TABLE H-22.--SHARES OF PRETAX ADJUSTED FAMILY INCOME (AFI) BY FAMILY TYPE AND INCOME QUINTILE, 1967, 1973, 1979, 1989, AND 1992 ------------------------------------------------------------------------ Family type and quintile 1967 1973 1979 1989 1992 ------------------------------------------------------------------------ All families: Lowest...................... 5.2 5.5 5.1 4.3 4.1 Second...................... 11.6 11.8 11.6 10.5 10.4 Middle...................... 16.9 17.1 17.3 16.5 16.6 Fourth...................... 23.7 23.9 24.3 24.0 24.3 Highest..................... 42.6 41.7 41.7 44.6 44.6 All families with children: Lowest...................... 6.2 6.0 5.4 4.4 4.1 Second...................... 12.8 12.8 12.5 11.1 10.8 Middle...................... 17.8 18.0 18.2 17.4 17.3 Fourth...................... 23.7 24.1 24.6 24.5 25.0 Highest..................... 39.7 39.0 39.3 42.6 42.9 Married couples with children: Lowest...................... 7.1 7.3 6.9 6.0 5.8 Second...................... 13.2 13.5 13.4 12.3 12.2 Middle...................... 17.7 18.0 18.2 17.6 17.7 Fourth...................... 23.3 23.5 24.0 23.8 24.1 Highest..................... 38.7 37.7 37.5 40.3 40.1 Single mothers with children: Lowest...................... 3.5 4.6 4.1 3.0 3.0 Second...................... 9.9 10.1 9.4 7.9 7.7 Middle...................... 15.3 14.7 15.3 13.9 14.0 Fourth...................... 24.4 23.7 25.3 24.7 25.0 Highest..................... 46.8 46.8 45.9 50.5 50.3 Nonelderly childless units: Lowest...................... 4.4 5.4 5.3 4.6 4.4 Second...................... 12.1 12.5 12.4 11.4 11.2 Middle...................... 18.1 18.1 18.1 17.2 17.4 Fourth...................... 24.6 24.4 24.5 24.4 24.6 Highest..................... 40.9 39.7 39.7 42.4 42.5 Nonelderly childless families: Lowest...................... 5.3 7.0 7.0 6.1 6.1 Second...................... 12.7 13.4 13.5 12.5 12.6 Middle...................... 18.2 18.3 18.4 17.7 17.8 Fourth...................... 24.3 23.7 23.8 23.9 24.0 Highest..................... 39.5 37.6 37.4 39.8 39.6 Nonelderly unrelated individuals: Lowest...................... 2.5 3.3 3.8 3.3 3.0 Second...................... 9.0 9.7 10.6 10.0 9.6 Middle...................... 16.7 16.5 17.1 16.3 16.3 Fourth...................... 25.5 24.9 24.8 24.3 24.6 Highest..................... 46.3 45.6 43.8 46.1 46.5 Elderly childless units: Lowest...................... 4.6 5.6 5.7 5.3 5.4 Second...................... 8.9 9.9 10.1 9.6 10.1 Middle...................... 13.9 14.4 15.2 14.7 15.1 Fourth...................... 22.6 22.1 22.8 22.4 22.3 Highest..................... 50.0 48.0 46.2 48.0 47.1 Elderly childless families: Lowest...................... 5.0 6.1 6.3 5.8 6.0 Second...................... 9.6 10.5 11.1 10.4 11.0 Middle...................... 14.7 15.1 15.9 15.2 15.7 Fourth...................... 23.0 22.5 22.8 22.4 22.1 Highest..................... 47.7 45.8 43.9 46.2 45.2 Elderly unrelated individuals: Lowest...................... 5.3 6.3 6.5 6.3 6.3 Second...................... 9.6 10.9 10.3 10.1 10.1 Middle...................... 13.1 14.4 13.8 14.0 14.2 Fourth...................... 19.6 20.4 20.7 21.3 20.9 Highest..................... 52.4 47.9 48.7 48.2 48.6 ------------------------------------------------------------------------ Note: Poverty thresholds are based on the 1989 distribution of family sizes, with no adjustment for the age of the head of household or the number of children. Quintiles are based on the number of persons. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, and 1993. TABLE H-23.--AVERAGE FAMILY CASH INCOME BY FAMILY TYPE AND INCOME QUINTILE 1973, 1979, 1989, AND 1992 [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- Percent change Family type and income quintile 1973 1979 1989 1992 -------------------------- 1973-89 1979-89 1989-92 ---------------------------------------------------------------------------------------------------------------- All families: Lowest....................................... 6,061 5,994 5,866 5,256 -3.2 -2.1 -10.4 Second....................................... 15,416 15,306 15,107 13,885 -2.0 -1.3 -8.1 Middle....................................... 25,909 25,609 25,823 24,118 -0.3 0.8 -6.6 Fourth....................................... 37,946 38,680 40,374 38,367 6.4 4.4 -5.0 Highest...................................... 66,364 68,230 77,716 73,487 17.1 13.9 -5.4 -------------------------------------------------------------- Total...................................... 30,341 30,764 32,978 31,022 8.7 7.2 -5.9 ============================================================== All families with children: Lowest....................................... 10,529 9,369 7,714 6,568 -26.7 -17.7 -14.9 Second....................................... 23,176 22,365 20,664 18,561 -10.8 -7.6 -10.2 Middle....................................... 32,616 33,317 33,067 31,038 1.4 -0.8 -6.1 Fourth....................................... 43,426 44,940 47,217 45,427 8.7 5.1 -3.8 Highest...................................... 70,420 72,971 81,966 78,057 16.4 12.3 -4.8 -------------------------------------------------------------- Total...................................... 36,034 36,592 38,127 35,929 5.8 4.2 -5.8 ============================================================== Married couples with children: Lowest....................................... 15,450 15,148 14,606 13,491 -5.5 -3.6 -7.6 Second....................................... 27,170 28,294 28,660 27,471 5.5 1.3 -4.1 Middle....................................... 35,513 37,693 39,683 39,023 11.7 5.3 -1.7 Fourth....................................... 45,783 48,616 53,106 52,147 16.0 9.2 -1.8 Highest...................................... 72,842 76,547 88,168 84,522 21.0 15.2 -4.1 -------------------------------------------------------------- Total...................................... 39,352 41,260 44,846 43,327 14.0 8.7 -3.4 ============================================================== Single mothers with children: Lowest....................................... 3,505 3,338 2,563 2,308 -26.9 -23.2 -9.9 Second....................................... 7,931 8,122 6,737 6,086 -15.1 -17.1 -9.7 Middle....................................... 11,922 13,136 11,803 10,736 -1.0 -10.1 -9.0 Fourth....................................... 17,867 19,904 19,427 18,201 8.7 -2.4 -6.3 Highest...................................... 33,430 35,714 38,394 35,263 14.8 7.5 -8.2 -------------------------------------------------------------- Total...................................... 14,930 16,043 15,792 14,517 5.8 -1.6 -8.1 ============================================================== Nonelderly childless units: Lowest....................................... 5,809 5,863 5,727 4,990 -1.4 -2.3 -12.9 Second....................................... 15,886 15,808 15,840 14,496 -.3 0.2 -8.5 Middle....................................... 25,562 25,397 26,154 24,570 2.3 3.0 -6.1 Fourth....................................... 37,670 38,217 40,549 38,624 7.6 6.1 -4.7 Highest...................................... 67,136 69,142 79,550 74,864 18.5 15.1 -5.9 -------------------------------------------------------------- Total...................................... 30,412 30,886 33,565 31,507 10.4 8.7 -6.1 ============================================================== Nonelderly childless families: Lowest....................................... 13,044 13,881 13,712 13,240 5.1 -1.2 -3.4 Second....................................... 25,352 27,773 28,880 28,100 13.9 4.0 -2.7 Middle....................................... 35,256 38,599 41,716 40,551 18.3 8.1 -2.8 Fourth....................................... 47,199 51,058 57,713 55,483 22.3 13.0 -3.9 Highest...................................... 76,867 83,026 98,413 93,304 28.0 18.5 -5.2 -------------------------------------------------------------- Total...................................... 39,543 42,867 48,093 46,127 21.6 12.2 -4.1 ============================================================== Nonelderly unrelated individuals Lowest....................................... 2,948 3,504 3,522 2,950 19.5 .5 -16.2 Second....................................... 8,620 9,957 10,621 9,437 23.2 6.7 -11.1 Middle....................................... 14,628 16,065 17,389 15,898 18.9 8.2 -8.6 Fourth....................................... 22,105 23,330 25,849 24,075 16.9 10.8 -6.9 Highest...................................... 40,555 41,215 49,182 45,457 21.3 19.3 -7.6 -------------------------------------------------------------- Total...................................... 17,770 18,814 21,315 19,563 20.0 13.3 -8.2 ============================================================== Elderly childless units: Lowest....................................... 4,148 4,632 5,221 4,945 25.9 12.7 -5.3 Second....................................... 7,556 8,367 9,665 9,410 27.9 15.5 -2.6 Middle....................................... 11,628 13,325 15,446 14,936 32.8 15.9 -3.3 Fourth....................................... 18,576 21,202 25,021 23,750 34.7 18.0 -5.1 Highest...................................... 45,276 47,577 59,036 54,327 30.4 24.1 -8.0 -------------------------------------------------------------- Total...................................... 17,436 19,021 22,880 21,473 31.2 20.3 -6.2 ============================================================== Elderly childless families: Lowest....................................... 7,083 7,864 8,940 8,514 26.2 13.7 4.8 Second....................................... 12,074 13,841 15,967 15,666 32.2 15.4 1.9 Middle....................................... 17,200 19,750 23,381 22,497 35.9 18.4 -3.8 Fourth....................................... 26,124 28,889 34,869 32,016 33.5 20.7 -8.2 Highest...................................... 56,136 57,963 75,091 67,731 33.8 29.5 -9.8 -------------------------------------------------------------- Total...................................... 23,723 25,661 31,657 29,282 33.4 23.4 -7.5 ============================================================== Elderly unrelated individuals: Lowest....................................... 3,108 3,717 4,221 4,061 35.8 13.6 -3.8 Second....................................... 5,393 5,932 6,806 6,513 26.2 14.7 -4.3 Middle....................................... 7,114 7,963 9,414 9,206 32.3 18.2 -2.2 Fourth....................................... 10,046 11,881 14,286 13,482 42.2 20.2 -5.6 Highest...................................... 23,626 27,984 32,331 31,387 36.8 15.5 -2.9 -------------------------------------------------------------- Total...................................... 9,857 11,495 13,414 12,925 36.1 16.7 -3.6 ---------------------------------------------------------------------------------------------------------------- Note: Quintiles are based on the number of families. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, and 1993. TABLE H-24.--FAMILY CASH INCOME LIMITS BY QUINTILE AND FAMILY TYPE [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- Year Percent change Family type ----------------------------------------------------------------- 1973 1979 1989 1992 1973-79 1979-89 1973-92 ---------------------------------------------------------------------------------------------------------------- All families: Lowest.................................... 10,561 10,604 10,452 9,545 0 -1 -9.6 Second.................................... 20,595 20,099 20,005 18,560 -2 0 -9.9 Middle.................................... 31,540 31,679 32,050 30,306 0 1 -3.9 Fourth.................................... 45,759 46,951 50,319 48,212 3 7 5.4 All families with children: Lowest.................................... 17,778 16,749 14,472 12,621 -6 -14 -29.0 Second.................................... 28,049 28,063 26,944 24,659 0 -4 -12.1 Middle.................................... 37,353 38,583 39,400 37,719 3 2 1.0 Fourth.................................... 50,745 52,386 56,415 54,708 3 8 7.8 Married couples with children: Lowest.................................... 22,606 22,946 22,678 21,505 2 -1 -4.9 Second.................................... 31,540 33,230 34,110 33,408 5 3 5.9 Middle.................................... 39,934 42,350 45,524 44,810 6 7 12.2 Fourth.................................... 52,937 56,109 62,200 60,895 6 11 15.0 Single mothers with children: Lowest.................................... 6,150 6,080 4,770 4,266 -1 -22 -30.6 Second.................................... 9,909 10,391 9,000 7,954 5 -13 -19.7 Middle.................................... 14,456 16,317 15,000 13,699 13 -8 -5.2 Fourth.................................... 21,933 24,286 24,935 23,008 11 3 4.9 Nonelderly childless unit: Lowest.................................... 11,039 11,222 11,053 9,877 2 -2 -10.5 Second.................................... 20,737 20,137 20,551 19,267 -3 2 -7.1 Middle.................................... 31,182 31,011 32,100 30,693 -1 4 -1.6 Fourth.................................... 45,982 46,911 50,681 48,669 2 8 5.8 Nonelderly childless families: Lowest.................................... 20,209 22,058 22,500 21,600 9 2 6.9 Second.................................... 30,257 33,377 35,010 34,344 10 5 13.5 Middle.................................... 40,665 44,217 48,900 47,196 9 11 16.1 Fourth.................................... 55,194 59,638 68,739 65,793 8 15 19.2 Nonelderly unrelated individuals: Lowest.................................... 5,677 6,782 7,200 6,364 19 6 12.1 Second.................................... 11,617 13,064 14,000 12,556 12 7 8.1 Middle.................................... 18,348 19,285 21,020 19,462 5 9 6.1 Fourth.................................... 26,591 28,390 31,635 29,343 7 11 10.4 Elderly childless units: Lowest.................................... 6,069 6,579 7,466 7,128 8 13 17.5 Second.................................... 9,330 10,562 12,215 11,803 13 16 26.5 Middle.................................... 14,230 16,473 19,249 18,477 16 17 29.8 Fourth.................................... 24,443 27,246 32,371 30,200 11 19 23.6 Elderly childless families: Lowest.................................... 9,967 11,284 12,767 12,565 13 13 26.1 Second.................................... 14,301 16,600 19,454 18,782 16 17 31.3 Middle.................................... 20,711 23,147 28,000 26,419 12 21 27.6 Fourth.................................... 33,353 36,412 43,400 39,294 9 19 17.8 Elderly unrelated individuals: Lowest.................................... 4,452 5,001 5,688 5,437 12 14 22.1 Second.................................... 6,274 6,860 7,904 7,645 9 15 21.9 Middle.................................... 8,129 9,493 11,368 10,924 17 20 34.4 Fourth.................................... 12,490 15,074 18,061 16,992 21 20 36.1 Other families with children: Lowest.................................... 18,713 16,556 14,008 11,638 -12 -15 -37.8 Second.................................... 28,793 27,611 24,100 21,212 -4 -13 -26.3 Middle.................................... 40,145 39,715 36,150 31,871 -1 -9 -20.6 Fourth.................................... 55,066 55,759 55,075 49,455 1 -1 -10.2 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, and 1993. TABLE H-25.--SHARES OF FAMILY CASH INCOME, BY INCOME QUINTILE AND FAMILY TYPE, 1973, 1979, 1989, AND 1992 [In percent] ------------------------------------------------------------------------ Family type and quintile 1973 1979 1989 1992 ------------------------------------------------------------------------ All families: Lowest...................... 4.0 3.9 3.6 3.4 Second...................... 10.2 10.0 9.2 9.0 Middle...................... 17.1 16.6 15.7 15.5 Fourth...................... 25.0 25.1 24.5 24.7 Highest..................... 43.7 44.4 47.1 47.4 All families with children: Lowest...................... 5.8 5.1 4.0 3.7 Second...................... 12.9 12.2 10.8 10.3 Middle...................... 18.1 18.2 17.3 17.3 Fourth...................... 24.1 24.6 24.8 25.3 Highest..................... 39.1 39.9 43.0 43.4 Married couples with children: Lowest...................... 7.9 7.3 6.5 6.2 Second...................... 13.8 13.7 12.8 12.7 Middle...................... 18.0 18.3 17.7 18.0 Fourth...................... 23.3 23.6 23.7 24.1 Highest..................... 37.0 37.1 39.3 39.0 Single mothers with children: Lowest...................... 4.7 4.2 3.2 3.2 Second...................... 10.6 10.1 8.5 8.4 Middle...................... 16.0 16.4 14.9 14.8 Fourth...................... 23.9 24.8 24.6 25.1 Highest..................... 44.8 44.5 48.6 48.6 Nonelderly childless units: Lowest...................... 3.8 3.8 3.4 3.2 Second...................... 10.4 10.2 9.4 9.2 Middle...................... 16.8 16.4 15.6 15.6 Fourth...................... 24.8 24.7 24.2 24.5 Highest..................... 44.2 44.8 47.4 47.5 Nonelderly childless families: Lowest...................... 6.6 6.5 5.7 5.7 Second...................... 12.8 13.0 12.0 12.2 Middle...................... 17.8 18.0 17.3 17.6 Fourth...................... 23.9 23.8 24.0 24.1 Highest..................... 38.9 38.7 40.9 40.4 Nonelderly unrelated individuals: Lowest...................... 3.3 3.7 3.3 3.0 Second...................... 9.7 10.6 10.0 9.6 Middle...................... 16.5 17.1 16.3 16.3 Fourth...................... 24.9 24.8 24.3 24.6 Highest..................... 45.6 43.8 46.1 46.5 Elderly childless units: Lowest...................... 4.8 4.9 4.6 4.6 Second...................... 8.7 8.8 8.4 8.8 Middle...................... 13.3 14.0 13.5 13.9 Fourth...................... 21.3 22.3 21.9 22.1 Highest..................... 51.9 50.0 51.6 50.6 Elderly childless families: Lowest...................... 6.0 6.1 5.6 5.8 Second...................... 10.2 10.8 10.1 10.7 Middle...................... 14.5 15.4 14.8 15.4 Fourth...................... 22.0 22.5 22.0 21.9 Highest..................... 47.3 45.2 47.4 46.3 Elderly unrelated individuals: Lowest...................... 6.3 6.5 6.3 6.3 Second...................... 10.9 10.3 10.1 10.1 Middle...................... 14.4 13.9 14.0 14.2 Fourth...................... 20.4 20.7 21.3 20.9 Highest..................... 47.9 48.7 48.2 48.6 ------------------------------------------------------------------------ Note: Quintiles are based on the number of families. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, and 1993. TABLE H-26.--AVERAGE PRETAX AFI (INCOME AS A MULTIPLE OF POVERTY) BY FAMILY TYPE AND INCOME QUINTILE, 1973-92 ------------------------------------------------------------------------ 1973 1979 1989 1990 1991 1992 ------------------------------------------------------------------------ All families: Lowest.............. 0.93 0.92 0.87 0.84 0.80 0.78 Second.............. 1.97 2.09 2.10 2.04 1.98 1.96 Middle.............. 2.85 3.09 3.28 3.18 3.12 3.11 Fourth.............. 3.94 4.31 4.75 4.63 4.54 4.55 Highest............. 6.86 7.36 8.80 8.52 8.34 8.32 ----------------------------------------------- Total............. 3.31 3.55 3.96 3.84 3.76 3.74 =============================================== All families with children: Lowest.............. 0.91 0.85 0.74 0.71 0.66 0.65 Second.............. 1.91 1.96 1.86 1.79 1.72 1.72 Middle.............. 2.67 2.85 2.92 2.79 2.76 2.76 Fourth.............. 3.55 3.84 4.12 3.97 3.96 3.98 Highest............. 5.72 6.11 7.14 6.89 6.76 6.82 ----------------------------------------------- Total............. 2.95 3.12 3.36 3.23 3.17 3.18 =============================================== Married couples with children: Lowest.............. 1.19 1.20 1.15 1.12 1.07 1.07 Second.............. 2.15 2.30 2.34 2.27 2.24 2.25 Middle.............. 2.86 3.13 3.34 3.22 3.23 3.26 Fourth.............. 3.72 4.11 4.51 4.41 4.39 4.43 Highest............. 5.93 6.38 7.63 7.39 7.28 7.33 ----------------------------------------------- Total............. 3.17 3.42 3.80 3.68 3.64 3.67 =============================================== Single mothers with children: Lowest.............. 0.33 0.33 0.25 0.25 0.24 0.23 Second.............. 0.72 0.75 0.64 0.61 0.59 0.58 Middle.............. 1.05 1.22 1.13 1.07 1.02 1.05 Fourth.............. 1.67 2.01 1.98 1.90 1.86 1.85 Highest............. 3.32 3.67 4.03 3.79 3.77 3.71 ----------------------------------------------- Total............. 1.42 1.60 1.61 1.52 1.49 1.48 =============================================== Nonelderly childless units: Lowest.............. 1.21 1.23 1.17 1.13 1.10 1.05 Second.............. 2.79 2.88 2.89 2.84 2.76 2.70 Middle.............. 4.04 4.22 4.38 4.30 4.20 4.18 Fourth.............. 5.42 5.70 6.20 6.03 5.93 5.92 Highest............. 8.83 9.23 10.77 10.45 10.26 10.22 ----------------------------------------------- Total............. 4.46 4.65 5.08 4.95 4.85 4.81 =============================================== Nonelderly childless familes: Lowest.............. 1.73 1.84 1.77 1.78 1.74 1.68 Second.............. 3.28 3.56 3.62 3.60 3.51 3.50 Middle.............. 4.48 4.85 5.14 5.06 4.95 4.96 Fourth.............. 5.82 6.26 6.94 6.77 6.66 6.69 Highest............. 9.22 9.84 11.55 11.26 11.05 11.03 ----------------------------------------------- Total............. 4.91 5.27 5.80 5.69 5.58 5.57 =============================================== Nonelderly unrelated individuals: Lowest.............. 0.50 0.60 0.59 0.57 0.55 0.50 Second.............. 1.47 1.69 1.79 1.70 1.65 1.59 Middle.............. 2.49 2.73 2.93 2.86 2.78 2.68 Fourth.............. 3.74 3.93 4.36 4.24 4.17 4.06 Highest............. 6.78 6.88 8.30 7.95 7.84 7.66 ----------------------------------------------- Total............. 3.00 3.17 3.60 3.46 3.40 3.30 =============================================== Elderly childless units: Lowest.............. 0.82 0.90 1.01 1.00 0.99 0.95 Second.............. 1.44 1.61 1.84 1.86 1.84 1.80 Middle.............. 2.11 2.42 2.80 2.83 2.73 2.68 Fourth.............. 3.22 3.60 4.25 4.21 3.97 3.95 Highest............. 6.95 7.28 9.10 8.92 8.50 8.30 ----------------------------------------------- Total............. 2.91 3.16 3.80 3.76 3.60 3.53 =============================================== Elderly childless families: Lowest.............. 1.03 1.13 1.27 1.29 1.30 1.20 Second.............. 1.76 2.00 2.28 2.33 2.29 2.22 Middle.............. 2.51 2.85 3.32 3.37 3.20 3.15 Fourth.............. 3.71 4.08 4.86 4.77 4.51 4.44 Highest............. 7.58 7.83 10.05 9.82 9.42 9.05 ----------------------------------------------- Total............. 3.32 3.58 4.36 4.31 4.15 4.01 =============================================== Elderly unrelated individuals: Lowest.............. 0.57 0.68 0.77 0.74 0.74 0.74 Second.............. 0.99 1.09 1.25 1.21 1.19 1.19 Middle.............. 1.31 1.46 1.72 1.73 1.69 1.68 Fourth.............. 1.85 2.19 2.61 2.62 2.50 2.46 Highest............. 4.35 5.15 5.92 5.92 5.50 5.74 ----------------------------------------------- Total............. 1.81 2.12 2.45 2.44 2.32 2.36 ------------------------------------------------------------------------ Note: Adjusted family income equals pretax family cash income divided by the poverty threshold. Entries in this table are based on poverty thresholds that take age, gender, and rural residence into account, and are therefore not directly comparable with other tables in this section. Quintiles are based on the number of persons. In 1989, the Bureau of the Census revised its method of processing data from the Current Population Survey, which made the incomes of some families higher than what they would have been using the old method. For further discussion, see U.S. Bureau of the Census, ``Money Income and Poverty Status in the United States: 1988,'' Current Population Reports, Series P-60, No. 166, October 1989. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974-93. TABLE H-27.--AVERAGE FAMILY INCOME BY INCOME QUINTILE AND FAMILY TYPE, 1973-1992 [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- 1973 1979 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- All families: Lowest.......................................... 6,061 5,994 5,866 5,649 5,429 5,256 Second.......................................... 15,416 15,306 15,107 14,781 14,241 13,885 Middle.......................................... 25,909 25,609 25,823 25,191 24,387 24,118 Fourth.......................................... 37,946 38,680 40,374 39,269 38,446 38,367 Highest......................................... 66,364 68,230 77,716 75,429 73,680 73,487 ----------------------------------------------------------- Total......................................... 30,341 30,764 32,978 32,063 31,236 31,022 =========================================================== All families with children: Lowest.......................................... 10,529 9,369 7,714 7,317 6,730 6,568 Second.......................................... 23,176 22,365 20,664 19,834 19,024 18,561 Middle.......................................... 32,616 33,317 33,067 31,916 31,239 31,038 Fourth.......................................... 43,426 44,940 47,217 45,964 45,285 45,427 Highest......................................... 70,420 72,971 81,966 79,427 77,681 78,057 ----------------------------------------------------------- Total......................................... 36,034 36,592 38,127 36,890 35,989 35,929 =========================================================== Married couples with children: Lowest.......................................... 15,450 15,148 14,606 14,186 13,569 13,491 Second.......................................... 27,170 28,294 28,660 27,960 27,497 27,471 Middle.......................................... 35,513 37,693 39,683 38,810 38,583 39,023 Fourth.......................................... 45,783 48,616 53,106 52,275 52,042 52,147 Highest......................................... 72,842 76,547 88,168 85,483 84,140 84,522 ----------------------------------------------------------- Total......................................... 39,352 41,260 44,846 43,741 43,163 43,327 =========================================================== Single mothers with children: Lowest.......................................... 3,505 3,338 2,563 2,529 2,461 2,308 Second.......................................... 7,931 8,122 6,737 6,499 6,247 6,086 Middle.......................................... 11,922 13,136 11,803 11,238 10,785 10,736 Fourth.......................................... 17,867 19,904 19,427 18,703 18,503 18,201 Highest......................................... 33,430 35,714 38,394 36,228 36,019 35,263 ----------------------------------------------------------- Total......................................... 14,930 16,043 15,792 15,036 14,797 14,517 =========================================================== Nonelderly childless units: Lowest.......................................... 5,809 5,863 5,727 5,425 5,287 4,990 Second.......................................... 15,886 15,808 15,840 15,448 14,985 14,496 Middle.......................................... 25,562 25,397 26,154 25,518 24,961 24,570 Fourth.......................................... 37,670 38,217 40,549 39,503 38,897 38,624 Highest......................................... 67,136 69,142 79,550 77,006 75,405 74,864 ----------------------------------------------------------- Total......................................... 30,412 30,886 33,565 32,578 31,903 31,507 =========================================================== Nonelderly childless families: Lowest.......................................... 13,044 13,881 13,712 13,969 13,670 13,240 Second.......................................... 25,352 27,773 28,880 28,802 28,067 28,100 Middle.......................................... 35,256 38,599 41,716 41,203 40,572 40,551 Fourth.......................................... 47,199 51,058 57,713 56,552 55,733 55,483 Highest......................................... 76,867 83,026 98,413 96,054 93,869 93,304 ----------------------------------------------------------- Total......................................... 39,543 42,867 48,093 47,311 46,380 46,127 =========================================================== Nonelderly unrelated individuals: Lowest.......................................... 2,948 3,504 3,522 3,362 3,273 2,950 Second.......................................... 8,620 9,957 10,621 10,077 9,782 9,437 Middle.......................................... 14,628 16,065 17,389 16,950 16,484 15,898 Fourth.......................................... 22,105 23,330 25,849 25,189 24,776 24,075 Highest......................................... 40,555 41,215 49,182 47,167 46,520 45,457 ----------------------------------------------------------- Total......................................... 17,770 18,814 21,315 20,546 20,166 19,563 =========================================================== Elderly childless units: Lowest.......................................... 4,148 4,632 5,221 5,060 4,984 4,945 Second.......................................... 7,556 8,367 9,665 9,724 9,561 9,410 Middle.......................................... 11,628 13,325 15,446 15,702 15,226 14,936 Fourth.......................................... 18,576 21,202 25,021 25,097 23,771 23,750 Highest......................................... 45,276 47,577 59,036 58,134 55,280 54,327 ----------------------------------------------------------- Total......................................... 17,436 19,021 22,880 22,741 21,761 21,473 =========================================================== Elderly childless families: Lowest.......................................... 7,083 7,864 8,940 9,138 9,096 8,514 Second.......................................... 12,074 13,841 15,967 16,468 16,185 15,666 Middle.......................................... 17,200 19,750 23,381 23,917 22,861 22,497 Fourth.......................................... 26,124 28,889 34,869 34,665 32,736 32,016 Highest......................................... 56,136 57,963 75,091 73,345 70,387 67,731 ----------------------------------------------------------- Total......................................... 23,723 25,661 31,657 31,503 30,247 29,282 =========================================================== Elderly unrelated individuals: Lowest.......................................... 3,108 3,717 4,221 4,038 4,022 4,061 Second.......................................... 5,393 5,932 6,806 6,616 6,498 6,513 Middle.......................................... 7,114 7,963 9,414 9,468 9,233 9,206 Fourth.......................................... 10,046 11,881 13,973 14,286 13,692 13,482 Highest......................................... 23,626 27,984 32,331 32,398 30,106 31,387 ----------------------------------------------------------- Total......................................... 9,857 11,495 13,414 13,367 12,707 12,925 ---------------------------------------------------------------------------------------------------------------- Note: Quintiles are based on the number of families. In 1989, the Bureau of the Census revised its methods of processing data from the Current Population Survey, which made the incomes of some families higher than what they would have been using the old method. For further discussion, see U.S. Bureau of the Census, ``Money Income and Poverty Status in the United States: 1988,'' Current Population Reports, Series, P-60, No. 166, October 1989. Sources: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974-93.