APPENDIX H. DATA ON POVERTY MEASURING POVERTY When the Federal Government began measuring poverty in the early 1960s, 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 three 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 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. 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 1994 by age, race, region and family type. In 1994, 14.5 percent (38.1 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 (47.2 percent). Among children under age 18, nearly 22 percent, or 15.3 million children, lived in poverty in 1994. The poverty rate among families with children held steady at 17.4 percent between 1992 and 1994. The rate actually declined somewhat for both two-parent families with children and married-couple families with children. By contrast, the rate for other families with children increased sharply from 22.9 to 24.5 percent, offsetting the improvement in poverty rates among female-headed and married-couple families with children. The weighted average poverty thresholds for families of various sizes for selected years between 1959 and 1994 are presented in table H-2. TRENDS IN THE OVERALL POVERTY RATE \1\ --------------------------------------------------------------------------- \1\ 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 1961-65. --------------------------------------------------------------------------- In the late 1950s, the overall poverty rate for individuals in the United States was 22 percent, representing 39.5 million poor persons (tables H-3 and H-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 1994, the last year for which data are available, the poverty rate was 14.5 percent and 38.1 million people were poor. TABLE H-1.--POVERTY STATUS OF PERSONS BY AGE, RACE, REGION, AND FAMILY TYPE, 1994 -------------------------------------------------------------------------------------------------------------------------------------------------------- Poverty Poverty Population Percent of Number of Percent of difference Percent of Age, race, region, and family type rate (thousands) total poor poverty 1994-93 difference (percent) population (thousands) population (thousands) -------------------------------------------------------------------------------------------------------------------------------------------------------- Age: Under 18................................................... 21.8 70,020 26.8 15,289 40.2 -438 36.3 18 to 64................................................... 11.9 160,329 61.3 19,107 50.2 -674 55.9 65 and over................................................ 11.7 31,267 12.0 3,663 9.6 -92 7.6 ---------------------------------------------------------------------------------------- Total.................................................... 14.5 261,616 100.0 38,059 100.0 -1,206 100.0 ======================================================================================== Race: White...................................................... 11.7 216,460 82.7 25,379 66.7 -847 70.2 Black...................................................... 30.6 33,353 12.7 10,196 26.8 -681 56.5 Hispanic \1\............................................... 30.7 27,442 10.5 8,416 22.1 290 -24.0 Region: Northeast.................................................. 12.9 51,185 19.6 6,597 17.3 -242 20.1 Midwest.................................................... 13.0 61,379 23.5 7,965 20.9 -207 17.2 South...................................................... 16.1 91,717 35.1 14,729 38.7 -646 53.6 West....................................................... 15.3 57,335 21.9 8,768 23.0 -111 9.2 ---------------------------------------------------------------------------------------- Total.................................................... 14.5 261,616 100.0 38,059 100.0 -1,206 100.0 ======================================================================================== Family type: Unrelated individuals...................................... 21.5 38,538 14.7 8,287 21.8 -101 8.4 Female-headed families with children....................... 47.2 28,197 10.8 13,313 35.0 -284 23.5 Married-couple families with children...................... 9.5 110,648 42.3 10,485 27.5 -858 71.1 Other families with children............................... 24.5 5,407 2.1 1,325 3.5 225 -18.7 All other families......................................... 5.9 78,826 30.1 4,649 12.2 -188 15.6 ---------------------------------------------------------------------------------------- Total.................................................... 14.5 261,616 100.0 38,059 100.0 -1,206 100.0 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Persons of Hispanic origin may be of any race. Source: U.S. Bureau of the Census (1996). TABLE H-2.--WEIGHTED AVERAGE POVERTY THRESHOLDS FOR NONFARM FAMILIES OF SPECIFIED SIZE, SELECTED YEARS 1959-94 -------------------------------------------------------------------------------------------------------------------------------------------------------- Unrelated individuals Families of two persons or more ------------------------------------------------------------------------------------------------------------- Two persons Calendar year ------------------------------ Seven All ages Under Aged 65 Head Head Three Four Five Six persons age 65 or older All ages under aged 65 persons persons persons persons or more age 65 or 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 2,797 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\ 12,7 61 1981...................................... 4,620 4,729 4,359 5,917 6,111 5,498 7,250 9,287 11,007 12,449 \1\ 14,1 10 1982...................................... 4,901 5,019 4,626 6,281 6,487 5,836 7,693 9,862 11,684 13,207 \1\ 15,0 36 1983...................................... 5,061 5,180 4,775 6,483 6,697 6,023 7,938 10,178 12,049 13,630 \1\ 15,5 00 1984...................................... 5,278 5,400 4,979 6,762 6,983 6,282 8,277 10,609 12,566 14,207 \1\ 16,0 96 1985...................................... 5,469 5,593 5,156 6,998 7,231 6,503 8,573 10,989 13,007 14,696 \1\ 16,6 56 1986...................................... 5,572 5,701 5,255 7,138 7,372 6,630 8,737 11,203 13,259 14,986 \1\ 17,0 49 1987...................................... 5,778 5,909 5,447 7,397 7,641 6,872 9,056 11,611 13,737 15,509 \1\ 17,6 49 1988...................................... 6,022 6,155 5,674 7,704 7,958 7,157 9,435 12,092 14,304 16,146 \1\ 18,2 32 1989...................................... 6,310 6,451 5,947 8,076 8,343 7,501 9,885 12,674 14,990 16,921 \1\ 19,1 62 1990...................................... 6,652 6,800 6,268 8,509 8,794 7,905 10,419 13,359 15,792 17,839 \1\ 20,2 41 1991...................................... 6,932 7,086 6,532 8,865 9,165 8,241 10,860 13,924 16,456 18,587 \1\ 21,0 58 1992...................................... 7,143 7,299 6,729 9,137 9,443 8,487 11,186 14,335 16,952 19,137 \1\ 21,5 94 1993...................................... 7,363 7,518 6,930 9,414 9,728 8,740 11,522 14,763 17,449 19,718 \1\ 22,3 83 1994...................................... 7,547 7,710 7,108 9,661 9,976 8,967 11,821 15,141 17,900 20,235 \1\ 22,9 23 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Poverty threshold for seven persons, not seven persons or more. Source: U.S. Bureau of the Census, technical papers (for more information, see Series P-60, especially No. 189, or call the Housing & Household Economics Statistics Division of the Census Bureau in Washington, DC). TABLE H-3.--NUMBER OF PERSONS IN POVERTY FOR INDIVIDUALS IN SELECTED DEMOGRAPHIC GROUPS, 1959-94 ---------------------------------------------------------------------------------------------------------------- Individuals in female- Hispanic Year Overall Aged Children \1\ headed Black origin \3\ White families \2\ ---------------------------------------------------------------------------------------------------------------- 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.............................. 32,221 3,563 12,843 12,148 9,520 5,422 21,195 1988.............................. 31,745 3,481 12,455 11,972 9,356 5,357 20,715 1989.............................. 31,528 3,363 12,590 11,668 9,302 5,430 20,785 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 \4\.......................... 38,014 3,928 15,294 14,205 10,827 7,592 25,259 1993.............................. 39,265 3,755 15,727 14,636 10,877 8,126 26,226 1994.............................. 38,059 3,663 15,289 14,380 10,196 8,416 25,379 ---------------------------------------------------------------------------------------------------------------- \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. \4\ For 1992, figures are based on 1990 census population controls. NA--Not available. Source: U.S. Bureau of the Census (1996 and various years). TABLE H-4.--POVERTY RATES FOR INDIVIDUALS IN SELECTED DEMOGRAPHIC GROUPS, 1959-1994 ---------------------------------------------------------------------------------------------------------------- Individuals in female- Hispanic Year Overall Aged Children \1\ headed Black origin \3\ White 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 20.3 38.1 32.4 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 \4\............................ 14.8 12.9 22.3 39.0 33.4 29.6 11.9 1993................................ 15.1 12.2 22.7 38.7 33.1 30.6 12.2 1994................................ 14.5 11.7 21.8 38.6 30.6 30.7 11.7 ---------------------------------------------------------------------------------------------------------------- \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. \4\ For 1992, figures are based on 1990 census population controls. NA--Not available. Source: U.S. Bureau of the Census (1996 and various years). POVERTY RATES FOR INDIVIDUALS IN SELECTED SUBGROUPS OF THE POPULATION As table H-4 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 1959-94 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 11.7 percent in 1994. The poverty rate for whites was below the overall poverty rate throughout the entire 1959-94 period. It was 11.7 percent in 1994. The poverty rate for children exceeds the average rate; it was 21.8 percent in 1994 (see chart H-1). Poverty Rates for Families \2\ --------------------------------------------------------------------------- \2\ Income figures reported in this subsection were from the March Current Population Survey (CPS) computer data tapes. 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 1994. 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 1994, 44.6 percent of female-headed families with children were poor, compared with 9.3 percent of male-present families. Although only about 7 percent of all families with an aged member were poor, 23.1 percent of all aged unrelated individuals were poor. About 21 percent of nonaged unrelated individuals were poor. 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. CHART H-1. POVERTY RATES BY AGE: 1959-94 Source: U.S. Bureau of the Census. In 1983 the Bureau of Labor Statistics began using a rental equivalence approach to measure the value of housing. The official CPI-U inflation rate is based on the asset value of housing prior to 1983 and rental equivalence in 1983 and later. To provide a consistent time series, the Bureau constructed an experimental series, the CPI-U-X1, for 1967-82 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 (11 percent or 3.4 million persons) per year between 1979 and 1994. 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. TABLE H-5.--COMPOSITION OF POVERTY POPULATION FOR SELECTED DEMOGRAPHIC GROUPS, SELECTED YEARS 1959-1994 \1\ [Percent of poverty population] -------------------------------------------------------------------------------------------------------------------------------------------------------- Year Demographic group ----------------------------------------------------------------------------------------------- 1959 1966 1975 1985 1987 1988 1989 1990 1991 1992 1993 1994 -------------------------------------------------------------------------------------------------------------------------------------------------------- Aged.................................................... 13.9 17.9 12.8 10.5 10.9 11.0 10.7 10.9 10.6 10.3 9.6 9.6 Children................................................ 43.6 42.6 42.1 38.8 39.4 38.7 39.4 39.5 39.5 39.7 39.5 39.6 Nonaged adults.......................................... 42.5 39.5 45.1 50.7 49.7 50.3 49.9 49.7 49.9 49.9 50.9 50.8 Individuals in female-headed families \2\............... 26.3 36.0 47.4 49.5 52.6 52.9 52.4 53.4 54.0 52.6 52.4 52.8 Individuals in all other families \2\................... 73.7 64.0 52.6 50.5 47.4 47.1 47.6 46.6 46.0 47.4 47.6 47.2 Blacks.................................................. 25.1 31.1 29.2 27.0 29.8 29.5 29.5 29.3 28.7 28.5 27.7 26.8 Whites.................................................. 72.1 67.7 68.7 69.1 65.6 65.3 65.9 66.5 66.5 66.4 66.8 66.7 Other races............................................. 2.8 1.2 2.1 3.9 4.7 5.3 4.6 4.2 4.8 5.1 5.5 6.5 Hispanic origin \3\..................................... NA NA 11.6 15.8 16.9 16.9 17.2 17.9 17.8 20.0 20.7 22.1 Individuals in families with children \4\............... NA NA NA NA NA NA 67.9 68.0 68.4 68.4 68.7 68.0 Male present........................................ NA NA NA NA NA NA 31.3 30.7 30.3 31.4 32.0 31.2 Female-headed....................................... NA NA NA NA NA NA 36.6 37.2 38.1 37.0 36.7 36.9 Individuals in all other families....................... NA NA NA NA NA NA 32.1 32.0 31.6 31.6 31.3 32.0 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Date are for March of the following year. \2\ Includes unrealated 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.--Estimates for 1987-94 are not comparable to prior years due to processing changes in the Current Population Survey. Source: Prepared by Congressional Research Service based on data from March Current Population Survey and U.S. Bureau of the Census (1996 and various years). TABLE H-6.--POVERTY RATES BY FAMILY TYPE, SELECTED YEARS 1987-94, AND PERCENTAGE OF FAMILIES AND UNRELATED INDIVIDUALS BY RATIO OF TOTAL INCOME TO POVERTY THRESHOLD, 1994 \1\ \2\ ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Poverty rate, 1987-94 Percentage distributions by ratio of total income to poverty ------------------------------------------------ threshold, 1994 ----------------------------------------------------------------------- 1994 total Family type 3.00 (in 1987R 1988 1990 1991 1993 1994 Under 0.50-0.99 1.00-1.24 1.25-1.49 1.50-1.99 2.00-2.99 and thousands) 0.50 over ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Total: Families................................................. 11.0 10.8 11.1 11.8 12.7 12.0 4.8 7.2 4.0 4.5 9.2 18.3 52.1 69,986 Unrelated individuals.................................... 20.4 20.6 20.7 21.1 22.1 21.5 8.7 12.8 7.4 7.0 12.7 17.4 34.1 38,538 No members age 65 or over: Families................................................. 11.9 11.6 12.2 13.0 14.0 13.1 5.5 7.6 3.9 4.2 8.3 16.9 53.6 56,711 Unrelated individuals.................................... 19.1 19.3 19.1 19.6 21.3 20.9 10.3 10.6 5.4 5.4 10.9 17.2 40.2 28,108 Any member age 65 or over: Families................................................. 7.2 6.9 6.4 6.7 7.0 6.9 1.8 5.1 4.4 5.6 13.0 24.0 46.1 13,275 Unrelated individuals.................................... 23.9 24.1 24.7 24.9 24.1 23.1 4.4 18.7 12.6 11.3 17.4 17.8 17.8 10,430 Families with children: Female headed family, no husband present................. 46.3 45.5 45.3 47.6 46.7 44.6 21.9 22.7 8.2 7.3 11.2 15.1 13.7 9,215 Male present families.................................... 8.1 7.7 8.5 9.0 9.9 9.3 2.9 6.4 4.1 4.7 10.0 20.8 51.1 28,198 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ \1\ Based on census 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: Prepared by Congressional Research Service based on March Current Population Survey for selected years. TABLE H-7.--POVERTY UNDER ALTERNATIVE MEASURES OF INCOME AND PRICE INFLATION, 1979-94 ---------------------------------------------------------------------------------------------------------------- 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............................................... 14.8 13.4 10.5 9.5 29.1 1993............................................... 15.1 13.7 10.7 9.3 29.1 1994............................................... 14.5 13.2 10.2 9.0 29.7 Percent change: 1979-89........................................ 9.4 7.5 12.7 NA NA 1979-94........................................ 23.9 24.5 29.1 NA NA ---------------------------------------------------------------------------------------------------------------- \1\ Including income from capital gains, health insurance supplements to wage or salary income, non-means-tested and means-tested government cash transfers, other means-tested government noncash transfers, the value of Medicare, the value of regular-price school lunches, the value of Medicaid, the Earned Income Credit (EIC), less Social Security payroll taxes, less Federal income taxes (excluding the EIC), less State income taxes. Source: U.S. Bureau of the Census (1996 and various years). 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 1979-91, 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 third column in table H-7 is the poverty rate for years 1979-94 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 2.6 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 3 with the official rate in column 1. On average, the two Census Bureau adjustments reduce the poverty rate by over 4 percentage points or nearly 30 percent across the years 1979-94 and by 4.3 percentage points or nearly 11.3 million persons in 1994. The question of whether 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 15 years. Using the official CPI-U definition, the poverty rate increased by 23.9 percent between 1979 and 1994. Using the CPI-U-X1 inflator and factoring in all noncash benefits (including health benefits), poverty has increased by 29.1 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. Poverty by Metro Area and State Tables H-8 and H-9 present poverty rates for nonmetro and metro areas and by race in nonmetro and metro areas respectively. Table H-8 shows that poverty rates have increased almost twice as much in metro as compared with nonmetro areas. Table H-9 shows that poverty among blacks and Hispanics is much higher than rates among whites in metro areas, nonmetro areas, and inner cities. Table H-10 presents poverty rates by State for 1992-94. TABLE H-8.--PERCENTAGE OF PERSONS IN POVERTY IN NONMETRO AND METRO AREAS, 1978-94 ------------------------------------------------------------------------ Metro ------------------- Year 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...................................... 17.0 12.3 18.3 1988...................................... 16.0 12.2 18.1 1989...................................... 15.7 12.0 18.1 1990...................................... 16.3 12.7 19.0 1991...................................... 16.1 13.7 20.2 1992 \1\.................................. 16.9 14.2 20.9 1993...................................... 17.2 14.6 21.5 1994...................................... 16.0 14.2 20.9 Percent increase, 1978-94................. 18.5 36.5 35.7 ------------------------------------------------------------------------ \1\ For 1992, figures are based on 1990 census population controls. NA--Not available. Source: U.S. Bureau of the Census (1996 and various years). TABLE H-9.--PERCENTAGE OF PERSONS IN POVERTY BY RACE AND BY METRO AND NONMETRO RESIDENCE, 1994 ------------------------------------------------------------------------ Metro ------------------- Race Nonmetro Central Total cities only ------------------------------------------------------------------------ All races................................. 16.0 14.2 20.9 White..................................... 13.8 11.1 15.9 Black..................................... 35.4 29.8 34.2 Hispanic \1\.............................. 39.7 29.8 35.0 ------------------------------------------------------------------------ \1\ Persons of Hispanic origin may be of any race. Source: U.S. Bureau of the Census (1996). TABLE H-10.--POVERTY STATISTICS BY STATE, 1992-94 ------------------------------------------------------------------------ Year State -------------------------- 1992 1993 1994 ------------------------------------------------------------------------ Alabama...................................... 17.3 17.4 16.4 Alaska....................................... 10.2 9.1 10.2 Arizona...................................... 15.8 15.4 15.9 Arkansas..................................... 17.5 20.0 15.3 California................................... 16.4 18.2 17.9 Colorado..................................... 10.8 9.9 9.0 Connecticut.................................. 9.8 8.5 10.8 Delaware..................................... 7.8 10.2 8.3 District of Columbia......................... 20.3 26.4 21.2 Florida...................................... 15.6 17.8 14.9 Georgia...................................... 17.7 13.5 14.0 Hawaii....................................... 11.2 8.0 8.7 Idaho........................................ 15.2 13.1 12.0 Illinois..................................... 15.6 13.6 12.4 Indiana...................................... 11.8 12.2 13.7 Iowa......................................... 11.5 10.3 10.7 Kansas....................................... 11.1 13.1 14.9 Kentucky..................................... 19.7 20.4 18.5 Louisiana.................................... 24.5 26.4 25.7 Maine........................................ 13.5 15.4 9.4 Maryland..................................... 11.8 9.7 10.7 Massachusetts................................ 10.3 10.7 9.7 Michigan..................................... 13.6 15.4 14.1 Minnesota.................................... 13.0 11.6 11.7 Mississippi.................................. 24.6 24.7 19.9 Missouri..................................... 15.7 16.1 15.6 Montana...................................... 13.8 14.9 11.5 Nebraska..................................... 10.6 10.3 8.8 Nevada....................................... 14.7 9.8 11.1 New Hampshire................................ 8.7 9.9 7.7 New Jersey................................... 10.3 10.9 9.2 New Mexico................................... 21.6 17.4 21.1 New York..................................... 15.7 16.4 17.0 North Carolina............................... 15.8 14.4 14.2 North Dakota................................. 12.1 11.2 10.4 Ohio......................................... 12.5 13.0 14.1 Oklahoma..................................... 18.6 19.9 16.7 Oregon....................................... 11.4 11.8 11.8 Pennsylvania................................. 11.9 13.2 12.5 Rhode Island................................. 12.4 11.2 10.3 South Carolina............................... 19.0 18.7 13.8 South Dakota................................. 15.1 14.2 14.5 Tennessee.................................... 17.0 19.6 14.6 Texas........................................ 18.3 17.4 19.1 Utah......................................... 9.4 10.7 8.0 Vermont...................................... 10.5 10.0 7.6 Virginia..................................... 9.5 9.7 10.7 Washington................................... 11.2 12.1 11.7 West Virginia................................ 22.3 22.2 18.6 Wisconsin.................................... 10.9 12.6 9.0 Wyoming...................................... 10.3 13.3 9.3 ------------------------------------------------------------------------ Source: U.S. Bureau of the Census (1996). For 1992, figures are based on 1990 Census population controls. TRENDS IN FAMILY INCOMES, 1967-94 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 almost twice as fast as the population between 1973 and 1994. \3\ The growth in families reflects very different trends among particular types of families (see table H-11). The number of married couples with children, for example, fell almost 2 percent between 1973 and 1989 before rising by 3 percent between 1989 and 1994. In contrast, the number of families headed by a single mother grew by 102 percent over the entire 1973-94 period. --------------------------------------------------------------------------- \3\ 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 1994 than in 1973. TABLE H-11.--CHANGES IN POPULATION, FAMILY COMPOSITION, AND INCOME, SELECTED YEARS 1973-94 ---------------------------------------------------------------------------------------------------------------- Year Percent change Family group ------------------------------------------------------------------------- 1973 1979 1989 1994 1973-89 1979-89 1989-94 ---------------------------------------------------------------------------------------------------------------- A. Distribution of families and persons by family type Number of families (in thousands)..... 73,166 84,229 101,663 108,522 38.9 20.7 6.7 ------------------------------------------------------------------------- Families with children............ 31,098 32,166 34,768 37,413 11.8 8.1 7.6 Married couples with children. 24,798 24,166 24,378 25,079 -1.7 0.9 2.9 Single mothers with children.. 4,126 5,650 7,123 8,351 72.6 26.1 17.2 Nonelderly childless units \1\.... 28,183 35,730 46,467 49,580 64.9 30.1 6.7 Elderly childless units \2\....... 13,884 16,331 20,428 21,530 47.1 25.1 5.4 ========================================================================= Number of persons in different family types (in thousands)................. 207,525 217,718 245,846 261,614 18.5 12.9 6.4 ------------------------------------------------------------------------- Families with children............ 134,248 130,426 135,381 145,814 0.8 3.8 7.7 Married couples with children. 108,976 101,318 99,471 103,043 -8.7 -1.8 3.6 Single mothers with children.. 14,240 18,132 21,504 25,372 51.0 18.6 18.0 Nonelderly childless units \1\.... 50,148 60,514 77,025 80,323 53.6 27.3 4.3 Elderly childless units \2\....... 23,129 26,778 33,440 35,477 44.6 24.9 6.1 ========================================================================= B. Size, age composition, and number of earners for all families Average number of persons per family: Total........................... 2.87 2.59 2.42 2.41 -16.4 -6.6 -0.3 ------------------------------------------------------------------------- Under 18.......................... 0.94 0.75 0.63 0.65 -31.9 -16.1 2.5 18 to 64.......................... 1.64 1.55 1.50 1.48 -10.1 -3.4 -1.4 65 and older...................... 0.30 0.28 0.29 0.29 -1.9 3.9 -0.9 ========================================================================= Average number of earners per family: Total........................... 1.39 1.34 1.27 1.24 -6.9 -5.2 -2.0 ------------------------------------------------------------------------- Male earners...................... 0.81 0.75 0.69 0.67 -15.3 -8.5 -3.0 Female earners.................... 0.57 0.59 0.58 0.58 5.2 -1.1 -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 3,402 51.0 29.4 1.5 Mean family cash income........... 30,341 30,764 32,978 31,346 8.7 7.2 -5.0 Mean family cash income per capita \3\.............................. 10,718 11,922 13,743 13,003 28.2 15.3 -4.7 Adjusted pretax income \4\........ 19,096 20,592 23,025 22,004 20.6 11.8 -4.3 Adjusted posttax income \5\....... NA 17,404 19,424 18,707 NA 11.6 -3.5 High adult male earner........ NA 12,044 12,189 11,253 NA 1.2 -7.6 High adult female earner...... NA 4,111 5,633 5,896 NA 37.0 4.8 Other earners in family....... NA 923 894 710 NA -3.1 -19.2 Other private income.......... NA 2,021 2,700 2,388 NA 33.6 -13.0 Cash transfer income (non- means tested)................ NA 1,190 1,429 1,548 NA 20.0 12.5 Cash transfer income (means tested)...................... NA 302 180 208 NA -40.4 15.4 Noncash transfer income....... NA 145 139 179 NA -4.0 26.2 Taxes......................... NA -3,333 -3,740 -3,475 NA 12.2 -7.0 ---------------------------------------------------------------------------------------------------------------- \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 AFl (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 AFl is expressed in dollars by multiplying adjusted family income by the one-person poverty threshold. \5\ Posttax AFl (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 AFl is expressed is expressed in dollars by multiplying adjusted family income by the one-person poverty threshold. NA--Not available. Source: Congressional Budget Office based on Current Population Survey data. 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. 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 1994, 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, \4\ a revised version of the official Consumer Price Index that provides a consistent treatment of the costs of home ownership 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. --------------------------------------------------------------------------- \4\ 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 home ownership; 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 U.S. Bureau of the Census (1993, Appendixes 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 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 families increased 8.7 percent between 1973 and 1989, with most of the growth occurring between 1979 and 1989 (see panel A of table H-12). Family cash income also shows different trends among income quintiles: the average income of the lowest quintile fell 3.2 percent between 1973 and 1989, whereas the average income of the highest quintile rose 17.1 percent. Similarly, the decline in family income after 1989 was greater for families in the bottom quintiles. 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 panel C of table H-12). The growth in average per capita income 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. Both measures, however, show a decline in family income between 1989 and 1994. 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-12.--ALTERNATIVE MEASURES OF FAMILY INCOME BY INCOME QUINTILE AND CHANGE OVER TIME, SELECTED YEARS 1967- 94 FOR ALL FAMILIES [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- Year Percent change Income measure and quintile --------------------------------------------------------------------- 1967 1973 1979 1989 1994 1973-89 1979-89 1989-94 ---------------------------------------------------------------------------------------------------------------- I. Pretax cash income A. Mean family cash income (family weighted): Lowest................................ NA 6,061 5,994 5,866 5,194 -3.2 -2.1 -11.5 Second................................ NA 15,416 15,306 15,107 13,729 -2.0 -1.3 -9.1 Middle................................ NA 25,909 25,609 25,823 23,886 -0.3 0.8 -7.5 Fourth................................ NA 37,946 38,680 40,374 38,493 6.4 4.4 -4.7 Highest............................... NA 66,364 68,230 77,716 75,434 17.1 13.9 -2.9 --------------------------------------------------------------------- Total............................... NA 30,341 30,764 32,978 31,347 8.7 7.2 -4.9 ===================================================================== B. Mean adjusted family income (person weighted): \1\ Lowest................................ 0.69 0.90 0.90 0.86 0.77 -4.3 -4.3 -11.0 Second................................ 1.54 1.94 2.06 2.09 1.93 7.7 1.3 -7.3 Middle................................ 2.26 2.82 3.07 3.27 3.10 16.0 6.7 -5.4 Fourth................................ 3.16 3.94 4.32 4.77 4.61 20.9 10.5 -3.3 Highest............................... 5.67 6.87 7.39 8.84 8.57 28.7 19.6 -3.0 --------------------------------------------------------------------- Total............................... 2.66 3.29 3.55 3.97 3.80 20.4 11.8 -4.3 ===================================================================== C. Mean family income per capita (person weighted): \2\ Lowest................................ NA 2,795 2,912 2,822 2,443 1.0 -3.1 -12.7 Second................................ NA 5,906 6,535 6,872 6,319 16.4 5.2 -7.3 Middle................................ NA 8,628 9,713 10,723 10,083 24.3 10.4 -5.1 Fourth................................ NA 12,386 14,046 16,058 15,262 29.6 14.3 -4.1 Highest............................... NA 23,875 26,405 32,237 30,907 35.0 22.1 -3.5 --------------------------------------------------------------------- Total............................... NA 10,718 11,922 13,743 13,003 28.2 15.3 -4.7 ===================================================================== II. Posttax income plus food and housing benefits D. Mean adjusted family income \3\ (person weighted): \1\ Lowest................................ NA NA 0.96 0.93 0.89 NA -2.1 -4.7 Second................................ NA NA 1.89 1.90 1.81 NA 0.5 -4.8 Middle................................ NA NA 2.67 2.84 2.72 NA 6.4 -4.5 Fourth................................ NA NA 3.63 4.01 3.90 NA 10.6 -2.8 Highest............................... NA NA 5.85 7.04 6.82 NA 20.4 -3.1 --------------------------------------------------------------------- Total............................... NA NA 3.00 3.35 3.23 NA 11.6 -3.5 ---------------------------------------------------------------------------------------------------------------- \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. \3\ Posttax income plus food and housing benefits. NA--Not available. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, and 1995. 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-13). 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-13.--POVERTY THRESHOLDS AND EQUIVALENCE VALUES FOR DIFFERENT FAMILY SIZES, 1994 ------------------------------------------------------------------------ Equivalence Official Adjusted value (one Family size (persons) poverty poverty person = threshold threshold 1.00) ------------------------------------------------------------------------ 1.................................... $7,547 $6,928 1.00 2.................................... 9,661 8,867 1.28 3.................................... 11,812 10,853 1.57 4.................................... 15,141 13,916 2.01 5.................................... 17,900 16,457 2.37 6.................................... 20,235 18,587 2.68 7.................................... 22,923 21,038 3.04 8.................................... 25,427 23,416 3.37 9 or more............................ 30,300 27,975 4.01 ------------------------------------------------------------------------ Note.--Poverty thresholds shown for one- and two-person families are a weighted average of the separate official thresholds for elderly and nonelderly individuals and families. Adjusted poverty thresholds are computed using the CPI-U-X1 to adjust for inflation. The official poverty threshold is adjusted for inflation using the CPI. Source: Congressional Budget Office. The adjusted family income (AFI) measure shown in panel B of table H-12 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 1994 had an income of 3.10 times its poverty threshold. \5\ --------------------------------------------------------------------------- \5\ Poverty thresholds for one- and two-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 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 23 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. AFI decreased for all quintiles between 1989 and 1994 (see chart H-2). 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. 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 panel D of table H-12 shows posttax AFI, plus the estimated cash value of food and housing benefits, for 1979, 1989, and 1994. \6\ 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. \7\ --------------------------------------------------------------------------- \6\ 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. \7\ Unless stated otherwise, posttax AFI always includes the cash value of noncash food and housing benefits. --------------------------------------------------------------------------- There are interesting differences in the measurement of family income provided by pretax AFI (panel B) as compared with posttax AFI (panel D). The most notable difference between the two measures is in their levels: average posttax AFI (0.89) was about 16 percent higher than average pretax AFI (0.77) for the lowest quintile in 1994, but about 20 percent lower for the highest quintile (6.82 versus 8.57). 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. CHART H-2. RATIO OF AVERAGE ADJUSTED FAMILY INCOME OF HIGHEST QUINTILE TO AVERAGE INCOME OF LOWEST QUINTILE, 1967-94 Source: Congressional Budget Office. 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-14). In general, between 1973 and 1994, the shares of the lowest three quintiles fell, and the share of the top quintile rose. However, pretax family cash income (family weighted) of the fourth quintile declined slightly over the period, and the posttax adjusted family income of the fourth quintile remained constant over the 1979-94 period for which data is available. The measures show different patterns of shares at any point in time, however. In 1994, for example, the share of the top quintile was 48.1 percent when measured as family cash income, compared with 42.3 percent when measured as posttax AFI. TABLE H-14.--SHARES OF FAMILY INCOME BY INCOME QUINTILE FOR SELECTED YEARS 1967-94 FOR ALL FAMILIES [In percent] ------------------------------------------------------------------------ Year Income measure and quintile --------------------------------------- 1967 1973 1979 1989 1994 ------------------------------------------------------------------------ I. Pretax cash income A. Family cash income (family weighted): Lowest...................... NA 4.0 3.9 3.6 3.3 Second...................... NA 10.2 10.0 9.2 8.8 Middle...................... NA 17.1 16.6 15.7 15.2 Fourth...................... NA 25.0 25.1 24.5 24.6 Highest..................... NA 43.7 44.4 47.1 48.1 B. Adjusted family income (AFI) (person weighted): \1\ Lowest...................... 5.2 5.5 5.1 4.3 4.0 Second...................... 11.6 11.8 11.6 10.5 10.2 Middle...................... 16.9 17.1 17.3 16.5 16.3 Fourth...................... 23.7 23.9 24.3 24.0 24.3 Highest..................... 42.6 41.7 41.7 44.6 45.2 C. Family cash income per capita (person weighted): \2\ Lowest...................... NA 5.2 4.9 4.1 3.8 Second...................... NA 11.0 11.0 10.0 9.7 Middle...................... NA 16.1 16.3 15.6 15.5 Fourth...................... NA 23.1 23.6 23.4 23.5 Highest..................... NA 44.6 44.3 46.9 47.5 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 11.2 Middle...................... NA NA 17.8 17.0 16.8 Fourth...................... NA NA 24.2 24.0 24.2 Highest..................... NA NA 39.0 42.1 42.3 ------------------------------------------------------------------------ \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 1995. 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 1994, on average, and married couples with children made up a smaller fraction of all families (see table H-15). Additional insights can therefore be gained by looking at changes in incomes for specific family types. This analysis distinguishes six types of family units: 1. 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; 2. 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; 3. 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; 4. Nonelderly unrelated individuals, which are people over age 17 and under age 65 who are not living with relatives; 5. 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; and 6. Elderly unrelated individuals, which are people 65 or older who are not living with relatives. In addition, results are also presented for four aggregates: 1. All families with children, which comprises married couples, single mothers, and other families with children; 2. Nonelderly childless units, which comprises nonelderly childlessfamilies and nonelderly unrelated individuals; 3. Elderly childless units, which comprises elderly childless families and elderly unrelated individuals; and 4. All families, which comprises all families and unrelated individuals (i.e., the noninstitutional U.S. population). TABLE H-15.--AVERAGE FAMILY SIZE AND NUMBER OF FAMILIES, \1\ BY FAMILY TYPE, WEIGHTED BY FAMILIES, SELECTED YEARS 1973-94 ------------------------------------------------------------------------ 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 1994......................... 2.41 108,522 100.0 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 1994......................... 3.90 37,413 34.5 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 1994......................... 4.11 25,079 23.1 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 1994......................... 3.04 8,351 7.7 Nonelderly childless units: 1973......................... 1.76 28,183 38.5 1979......................... 1.68 35,730 42.4 1989......................... 1.66 46,467 45.7 1994......................... 1.62 49,580 45.7 Nonelderly childless families: 1973......................... 2.32 16,363 22.4 1979......................... 2.35 17,931 21.3 1989......................... 2.44 21,257 20.9 1994......................... 2.43 21,473 19.8 Nonelderly unrelated individuals: 1973......................... 1.00 11,820 16.2 1979......................... 1.00 17,799 21.1 1989......................... 1.00 25,210 24.8 1994......................... 1.00 28,106 25.9 Elderly childless units: 1973......................... 1.64 13,884 19.0 1979......................... 1.62 16,331 19.4 1989......................... 1.64 20,428 20.1 1994......................... 1.65 21,530 19.8 Elderly childless families: 1973......................... 2.17 7,590 10.4 1979......................... 2.16 8,676 10.3 1989......................... 2.23 10,600 10.4 1994......................... 2.26 11,100 10.2 Elderly unrelated individuals: 1973......................... 1.00 6,294 8.6 1979......................... 1.00 7,655 9.1 1989......................... 1.00 9,828 9.7 1994......................... 1.00 10,430 9.6 ------------------------------------------------------------------------ \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 1995. 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. 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-16). This compares with an income gain of 20.4 percent for all families. For families with children, 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. With few exceptions, the 1989-94 period saw declines in income across family types and income quintiles. The exceptions were married couples with children in the higher income quintiles and single mothers with children in the lowest income quintile. Most 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 over the period: 20.6 percent for married couples with children and 16.9 percent for single mothers with children. 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. Like the other family types, the income of most elderly units fell between 1989 and 1994. 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 1994 (see table H-17). Average Family Cash Income For all families, average cash income grew more slowly than average pretax 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. TABLE H-16.--AVERAGE PRETAX AFI (INCOME AS A MULTIPLE OF POVERTY) BY FAMILY TYPE AND INCOME QUINTILE, WEIGHTED BY PERSONS, SELECTED YEARS 1967-94 ---------------------------------------------------------------------------------------------------------------- Year Percent change Family type and quintile -------------------------------------------------------------------------------- 1967 1973 1979 1989 1994 1967-89 1973-89 1979-89 1989-94 ---------------------------------------------------------------------------------------------------------------- All families: Lowest..................... 0.69 0.90 0.90 0.85 0.77 25.1 -4.3 -4.3 -11.0 Second..................... 1.54 1.94 2.06 2.09 1.93 35.5 7.7 1.3 -7.3 Middle..................... 2.26 2.82 3.07 3.27 3.10 45.2 16.0 6.7 -5.4 Fourth..................... 3.16 3.94 4.32 4.77 4.61 50.8 20.9 10.5 -3.3 Highest.................... 5.67 6.87 7.39 8.84 8.57 56.0 28.7 19.6 -3.0 -------------------------------------------------------------------------------- Total.................... 2.66 3.29 3.55 3.97 3.80 49.0 20.4 11.8 -4.3 ================================================================================ All families with children: Lowest..................... 0.74 0.88 0.84 0.74 0.66 0.1 -16.1 -11.9 -11.1 Second..................... 1.54 1.88 1.95 1.87 1.73 21.6 -0.7 -4.2 -7.5 Middle..................... 2.13 2.65 2.84 2.93 2.79 37.4 10.8 3.3 -5.0 Fourth..................... 2.84 3.54 3.85 4.14 4.09 45.5 16.9 7.6 -1.3 Highest.................... 4.77 5.73 6.15 7.20 7.14 50.9 25.6 17.1 -0.9 -------------------------------------------------------------------------------- Total.................... 2.40 2.94 3.3 3.38 3.28 40.4 14.9 8.0 -2.9 ================================================================================ Married couples with children: Lowest..................... 0.89 1.16 1.18 1.14 1.06 27.9 -1.1 -2.9 -7.3 Second..................... 1.66 2.12 2.29 2.34 2.26 40.9 10.1 2.2 -3.4 Middle..................... 2.23 2.84 3.12 3.34 3.31 49.9 17.8 7.1 -0.9 Fourth..................... 2.93 3.71 4.11 4.52 4.58 54.2 21.9 10.2 1.2 Highest.................... 4.88 5.94 6.41 7.67 7.68 57.3 29.2 19.8 0.1 -------------------------------------------------------------------------------- Total.................... 2.52 3.15 3.42 3.80 3.78 51.1 20.6 11.2 -0.7 ================================================================================ Single mothers with children: Lowest..................... 0.21 0.33 0.32 0.25 0.25 18.6 -23.4 -22.9 1.0 Second..................... 0.59 0.71 0.75 0.64 0.62 9.3 -9.2 -13.8 -3.7 Middle..................... 0.91 1.03 1.22 1.14 1.11 26.0 10.7 -6.1 -2.7 Fourth..................... 1.45 1.67 2.01 2.03 1.94 39.9 21.5 0.6 -4.3 Highest.................... 2.78 3.29 3.65 4.14 4.02 49.2 26.0 13.5 -2.9 -------------------------------------------------------------------------------- Total.................... 1.19 1.41 1.59 1.64 1.59 38.5 16.9 3.2 -3.2 ================================================================================ Nonelderly childless units: Lowest..................... 0.80 1.22 1.24 1.19 1.00 49.3 -1.8 -3.9 -16.2 Second..................... 2.19 2.81 2.91 2.94 2.68 34.0 4.5 0.9 -8.8 Middle..................... 3.28 4.09 4.27 4.45 4.20 35.6 8.9 4.2 -5.7 Fourth..................... 4.47 5.49 5.78 6.29 6.04 40.8 14.5 8.8 -3.9 Highest.................... 7.42 8.95 9.35 10.94 10.66 47.4 22.3 17.1 -2.6 -------------------------------------------------------------------------------- Total.................... 3.63 4.51 4.71 5.16 4.92 42.1 14.4 9.6 -4.8 ================================================================================ Nonelderly childless families: Lowest..................... 1.03 1.74 1.85 1.80 1.68 74.2 3.5 -2.8 -6.8 Second..................... 2.47 3.31 3.59 3.68 3.52 49.1 11.1 2.5 -4.2 Middle..................... 3.52 4.53 4.89 5.20 5.05 48.0 15.0 6.3 -2.9 Fourth..................... 4.70 5.88 6.33 7.03 6.90 49.6 19.5 11.1 -1.9 Highest.................... 7.65 9.33 9.94 11.72 11.53 53.3 25.7 17.9 -1.7 -------------------------------------------------------------------------------- Total.................... 3.87 4.96 5.32 5.89 5.74 52.0 18.8 10.7 -2.6 ================================================================================ Nonelderly unrelated individuals: Lowest..................... 0.32 0.51 0.61 0.61 0.47 90.4 19.4 -0.4 -23.1 Second..................... 1.14 1.49 1.72 1.83 1.57 61.1 23.1 6.4 -14.2 Middle..................... 2.12 2.53 2.78 3.00 2.70 41.5 18.8 8.0 -10.0 Fourth..................... 3.23 3.82 4.03 4.46 4.14 37.9 16.9 10.6 -7.2 Highest.................... 5.88 7.00 7.11 8.48 8.08 44.3 21.2 19.3 -4.8 -------------------------------------------------------------------------------- Total.................... 2.54 3.07 3.25 3.68 3.39 44.9 19.9 13.1 -7.8 ================================================================================ Elderly childless units: Lowest..................... 0.48 0.76 0.84 0.95 0.93 96.8 24.7 13.4 -2.5 Second..................... 0.95 1.34 1.50 1.73 1.73 82.6 28.6 14.8 0.3 Middle..................... 1.48 1.97 2.26 2.64 2.52 78.1 34.1 16.9 -4.6 Fourth..................... 2.40 3.02 3.38 4.02 3.74 67.3 33.2 19.1 -7.1 Highest.................... 5.32 6.54 6.85 8.63 8.00 62.1 32.0 26.0 -7.3 -------------------------------------------------------------------------------- Total.................... 2.13 2.73 2.97 3.59 3.38 68.9 31.8 21.2 -5.9 ================================================================================ Elderly childless families: Lowest..................... 0.60 0.96 1.06 1.20 1.20 100.2 25.3 13.5 0.5 Second..................... 1.16 1.63 1.86 2.15 2.11 85.9 31.5 15.2 -1.7 Middle..................... 1.77 2.34 2.67 3.14 2.97 77.6 34.0 17.4 -5.5 Fourth..................... 2.76 3.50 3.83 4.61 4.26 67.2 31.8 20.3 -7.8 Highest.................... 5.73 7.12 7.37 9.54 8.69 66.7 34.0 29.4 -8.9 -------------------------------------------------------------------------------- Total.................... 2.40 3.11 3.36 4.13 3.85 72.0 32.7 22.9 -6.8 ================================================================================ Elderly unrelated individuals: Lowest..................... 0.35 0.54 0.64 0.73 0.67 109.0 35.7 13.6 -7.4 Second..................... 0.63 0.93 1.02 1.17 1.17 86.1 26.1 14.7 -0.8 Middle..................... 0.86 1.23 1.37 1.62 1.62 88.9 32.2 18.2 0.0 Fourth..................... 1.29 1.73 2.05 2.46 2.34 91.2 42.1 20.2 -5.3 Highest.................... 3.44 4.08 4.83 5.58 5.57 62.3 36.8 15.5 -0.2 -------------------------------------------------------------------------------- Total.................... 1.31 1.70 1.98 2.31 2.27 76.3 36.0 16.7 -1.8 ---------------------------------------------------------------------------------------------------------------- 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 the number of persons. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1968, 1974, 1980, 1990, and 1995. TABLE H-17.--SHARES OF PRETAX ADJUSTED FAMILY INCOME (AFI) BY FAMILY TYPE AND INCOME QUINTILE, SELECTED YEARS 1967-94 ------------------------------------------------------------------------ Year Family type and quintile --------------------------------------- 1967 1973 1979 1989 1994 ------------------------------------------------------------------------ All families: Lowest...................... 5.2 5.5 5.1 4.3 4.0 Second...................... 11.6 11.8 11.6 10.5 10.2 Middle...................... 16.9 17.1 17.3 16.5 16.3 Fourth...................... 23.7 23.9 24.3 24.0 24.3 Highest..................... 42.6 41.7 41.7 44.6 45.2 All families with children: Lowest...................... 6.2 6.0 5.4 4.4 4.0 Second...................... 12.8 12.8 12.5 11.1 10.5 Middle...................... 17.8 18.0 18.2 17.4 17.0 Fourth...................... 23.7 24.1 24.6 24.5 24.9 Highest..................... 39.7 39.0 39.3 42.6 43.5 Married couples with children: Lowest...................... 7.1 7.3 6.9 6.0 5.6 Second...................... 13.2 13.5 13.4 12.3 12.0 Middle...................... 17.7 18.0 18.2 17.6 17.5 Fourth...................... 23.3 23.5 24.0 23.8 24.2 Highest..................... 38.7 37.7 37.5 40.3 40.7 Single mothers with children: Lowest...................... 3.5 4.6 4.1 3.0 3.2 Second...................... 9.9 10.1 9.4 7.9 7.8 Middle...................... 15.3 14.7 15.3 13.9 14.0 Fourth...................... 24.4 23.7 25.3 24.7 24.4 Highest..................... 46.8 46.8 45.9 50.5 50.6 Nonelderly childless units: Lowest...................... 4.4 5.4 5.3 4.6 4.1 Second...................... 12.1 12.5 12.4 11.4 10.9 Middle...................... 18.1 18.1 18.1 17.2 17.1 Fourth...................... 24.6 24.4 24.5 24.4 24.6 Highest..................... 40.9 39.7 39.7 42.4 43.4 Nonelderly childless families: Lowest...................... 5.3 7.0 7.0 6.1 5.8 Second...................... 12.7 13.4 13.5 12.5 12.3 Middle...................... 18.2 18.3 18.4 17.7 17.6 Fourth...................... 24.3 23.7 23.8 23.9 24.1 Highest..................... 39.5 37.6 37.4 39.8 40.2 Nonelderly unrelated individuals: Lowest...................... 2.5 3.3 3.8 3.3 2.8 Second...................... 9.0 9.7 10.6 10.0 9.3 Middle...................... 16.7 16.5 17.1 16.3 15.9 Fourth...................... 25.5 24.9 24.8 24.3 24.4 Highest..................... 46.3 45.6 43.8 46.1 47.6 Elderly childless units: Lowest...................... 4.6 5.6 5.7 5.3 5.5 Second...................... 8.9 9.9 10.1 9.6 10.2 Middle...................... 13.9 14.4 15.2 14.7 14.9 Fourth...................... 22.6 22.1 22.8 22.4 22.1 Highest..................... 50.0 48.0 46.2 48.0 47.3 Elderly childless families: Lowest...................... 5.0 6.1 6.3 5.8 6.3 Second...................... 9.6 10.5 11.1 10.4 11.0 Middle...................... 14.7 15.1 15.9 15.2 15.4 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 5.9 Second...................... 9.6 10.9 10.3 10.1 10.3 Middle...................... 13.1 14.4 13.8 14.0 14.3 Fourth...................... 19.6 20.4 20.7 21.3 20.5 Highest..................... 52.4 47.9 48.7 48.2 49.0 ------------------------------------------------------------------------ Note.--Poverty thresholds are based on the 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 1995. 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-18). The average for the lowest quintile fell 26.7 percent during the 1973-89 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. Similarly, although most family types experienced cash income declines over the 1989 to 1994 period, the declines were either smaller or nonexistent for upper- income married couples with children but were generally greater among upper-income 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 and income declines in almost every quintile between 1989 and 1994. Table H-19 shows family cash income limits (the income cutoffs between quintiles) by quintile and family type. Between 1973 and 1994, 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 except elderly childless units and families, income limits among the higher quintiles have increased more than among the lower quintiles. In fact, income limits for the lower quintiles have decreased for several family types. TABLE H-18.--AVERAGE FAMILY CASH INCOME BY FAMILY TYPE AND INCOME QUINTILE, SELECTED YEARS 1973-94 [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- Year Percent change Family type and income quintile -------------------------------------------------------------- 1973 1979 1989 1994 1973-89 1979-89 1989-94 ---------------------------------------------------------------------------------------------------------------- All families: Lowest....................................... 6,061 5,994 5,886 5,194 -3.2 -2.1 -11.5 Second....................................... 15,416 15,306 15,107 13,729 -2.0 -1.3 -9.1 Middle....................................... 25,909 25,609 25,823 23,886 -0.3 0.8 -7.5 Fourth....................................... 37,946 38,680 40,374 38,493 6.4 4.4 -4.7 Highest...................................... 66,364 68,230 77,716 75.434 17.1 13.9 -2.9 -------------------------------------------------------------- Total...................................... 30,341 30,764 32,978 31,347 8.7 7.2 -4.9 ============================================================== All families with children: Lowest....................................... 10,529 9,369 7,714 6,843 -26.7 -17.7 -11.3 Second....................................... 23,176 22,365 20,664 18,790 -10.8 -7.6 -9.1 Middle....................................... 32,616 33,317 33,067 31,315 1.4 -0.8 -5.3 Fourth....................................... 43,426 44,940 47,217 46,412 8.7 5.1 -1.7 Highest...................................... 70,420 72,971 81,966 81,430 16.4 12.3 -0.7 -------------------------------------------------------------- Total...................................... 36,034 36,592 38,127 36,958 5.8 4.2 -3.1 ============================================================== Married couples with children: Lowest....................................... 15,450 15,148 14,606 13,564 -5.5 -3.6 -7.2 Second....................................... 27,170 28,294 28,660 27,732 5.5 1.3 -3.3 Middle....................................... 35,513 37,693 39,683 39,425 11.7 5.3 -0.7 Fourth....................................... 45,783 48,616 53,106 53,798 16.0 9.2 1.3 Highest...................................... 72,842 76,547 88,168 88,576 21.0 15.2 0.5 -------------------------------------------------------------- Total...................................... 39,352 41,260 44,846 44,619 14.0 8.7 -0.5 ============================================================== Single mothers with children: Lowest....................................... 3,505 3,338 2,563 2,738 -26.9 -23.2 6.7 Second....................................... 7,931 8,122 6,737 6,626 -15.1 -17.1 -1.7 Middle....................................... 11,922 13,136 11,803 11,349 -1.0 -10.1 -3.9 Fourth....................................... 17,867 19,904 19,427 18,905 8.7 -2.4 -2.8 Highest...................................... 33,430 35,714 38,394 37,227 14.8 7.5 -3.1 -------------------------------------------------------------- Total...................................... 14,930 16,043 15,792 15,369 5.8 -1.6 -2.7 ============================================================== Nonelderly childless units: Lowest....................................... 5,809 5,863 5,727 4,584 -1.4 -2.3 -20.0 Second....................................... 15,886 15,808 15,840 13,926 -0.3 0.2 -12.1 Middle....................................... 25,562 25,397 26,154 23,930 2.3 3.0 -8.5 Fourth....................................... 37,670 38,217 40,549 38,140 7.6 6.1 -5.9 Highest...................................... 67,136 69,142 79,550 76,026 18.5 15.1 -4.4 -------------------------------------------------------------- Total...................................... 30,412 30,886 33,565 31,321 10.4 8.7 -6.7 ============================================================== Nonelderly childless families: Lowest....................................... 13,044 13,881 13,712 12,860 5.1 -1.2 -6.2 Second....................................... 25,352 27,773 28,880 27,670 13.9 4.0 -4.2 Middle....................................... 35,256 38,599 41,716 40,477 18.3 8.1 -3.0 Fourth....................................... 47,199 51,058 57,713 56,304 22.3 13.0 -2.5 Highest...................................... 76,867 83,026 98,413 95,606 28.0 18.5 -2.9 -------------------------------------------------------------- Total...................................... 39,543 42,867 48,093 46,583 21.6 12.2 -3.1 ============================================================== Nonelderly unrelated individuals: Lowest....................................... 2,948 3,504 3,522 2,710 19.5 0.5 -23.1 Second....................................... 8,620 9,957 10,621 9,114 23.2 6.7 -14.2 Middle....................................... 14,628 16,065 17,389 15,653 18.5 8.2 -10.0 Fourth....................................... 22,105 23,330 25,849 23,985 16.9 10.8 -7.2 Highest...................................... 40,555 41,215 49,182 46,855 21.3 19.3 -4.7 -------------------------------------------------------------- Total...................................... 17,770 18,814 21,315 19,663 20.0 13.3 -7.8 ============================================================== Elderly childless units: Lowest....................................... 4,148 4,632 5,221 5,003 25.9 12.7 -4.2 Second....................................... 7,556 8,367 9,665 9,674 27.9 15.5 0.1 Middle....................................... 11,628 13,325 15,446 14,964 32.8 15.9 -3.1 Fourth....................................... 18,576 21,202 25,021 23,524 34.7 18.0 -6.0 Highest...................................... 45,276 47,577 59,036 55,109 30.4 24.1 -6.7 -------------------------------------------------------------- Total...................................... 17,436 19,021 22,880 21,655 31.2 20.3 -5.4 ============================================================== Elderly childless families: Lowest....................................... 7,083 7,864 8,940 9,084 26.2 13.7 1.6 Second....................................... 12,074 13,841 15,967 15,841 32.2 15.4 -0.8 Middle....................................... 17,200 19,750 23,381 22,346 35.9 18.4 -4.5 Fourth....................................... 26,124 28,889 34,869 32,259 33.5 20.7 -7.5 Highest...................................... 56,136 57,963 75,091 68,613 33.8 29.5 -8.7 -------------------------------------------------------------- Total...................................... 23,723 25,661 31,657 29,629 33.4 23.4 -6.4 ============================================================== Elderly unrelated individuals: Lowest....................................... 3,108 3,717 4,221 3,908 35.8 13.6 -7.4 Second....................................... 5,393 5,932 6,806 6,755 26.2 14.7 -0.8 Middle....................................... 7,114 7,963 9,414 9,417 32.3 18.2 0.0 Fourth....................................... 10,046 11,881 14,286 13,538 42.2 20.2 -5.3 Highest...................................... 23,626 27,984 32,331 32,275 36.8 15.5 -0.2 -------------------------------------------------------------- Total...................................... 9,857 11,495 13,414 13,179 36.1 16.7 -1.8 ---------------------------------------------------------------------------------------------------------------- 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 1995. TABLE H-19.--FAMILY CASH INCOME LIMITS BY QUINTILE AND FAMILY TYPE \1\ ---------------------------------------------------------------------------------------------------------------- Year Percent change Family type -------------------------------------------------------------- 1973 1979 1989 1994 1973-79 1979-89 1973-94 ---------------------------------------------------------------------------------------------------------------- All families: Lowest....................................... 10,561 10,604 10,452 9,458 0 -1 -10.4 Second....................................... 20,595 20,099 20,005 18,408 -2 0 -10.6 Middle....................................... 31,540 31,679 32,050 30,067 0 1 -4.7 Fourth....................................... 45,759 46,951 50,319 49,186 3 7 7.5 All families with children: Lowest....................................... 17,778 16,749 14,472 12,634 -6 -14 -28.9 Second....................................... 28,049 28,063 26,944 25,101 0 -4 -10.5 Middle....................................... 37,353 38,583 39,400 37,931 3 2 1.5 Fourth....................................... 50,745 52,386 56,415 56,352 3 8 11.0 Married couples with children: Lowest....................................... 22,606 22,946 22,678 21,504 2 -1 -4.9 Second....................................... 31,540 33,230 34,110 33,555 5 3 6.4 Middle....................................... 39,934 42,350 45,524 45,601 6 7 14.2 Fourth....................................... 52,937 56,109 62,200 63,352 6 11 19.7 Single mothers with children: Lowest....................................... 6,150 6,080 4,770 4,769 -1 -22 -22.5 Second....................................... 9,909 10,391 9,000 8,715 5 -13 -12.0 Middle....................................... 14,456 16,317 15,000 14,312 13 -8 -1.0 Fourth....................................... 21,933 24,286 24,935 24,032 11 3 9.6 Nonelderly childless unit: Lowest....................................... 11,039 11,222 11,053 9,371 2 -2 -15.1 Second....................................... 20,737 20,137 20,551 18,583 -3 2 -10.4 Middle....................................... 31,182 31,011 32,100 29,778 -1 4 -4.5 Fourth....................................... 45,982 46,911 50,681 48,835 2 8 6.2 Nonelderly childless families: Lowest....................................... 20,209 22,058 22,500 21,338 9 2 5.6 Second....................................... 30,257 33,377 35,010 33,887 10 5 12.0 Middle....................................... 40,665 44,217 48,900 47,692 9 11 17.3 Fourth....................................... 55,194 59,638 68,739 67,029 8 15 21.4 Nonelderly unrelated individuals: Lowest....................................... 5,677 6,782 7,200 6,091 19 6 7.3 Second....................................... 11,617 13,064 14,000 12,300 12 7 5.9 Middle....................................... 18,348 19,285 21,020 19,453 5 9 6.0 Fourth....................................... 26,591 28,390 31,635 29,517 7 11 11.0 Elderly childless units: Lowest....................................... 6,069 6,579 7,466 7,441 8 13 22.6 Second....................................... 9,330 10,562 12,215 12,042 13 16 29.1 Middle....................................... 14,230 16,473 19,249 18,176 16 17 27.7 Fourth....................................... 24,443 27,246 32,371 30,320 11 19 24.0 Elderly childless families: Lowest....................................... 9,967 11,284 12,767 13,034 13 13 30.8 Second....................................... 14,301 16,600 19,454 18,649 16 17 30.4 Middle....................................... 20,711 23,147 28,000 26,365 12 21 27.3 Fourth....................................... 33,353 36,412 43,400 40,876 9 19 22.6 Elderly unrelated individuals: Lowest....................................... 4,452 5,001 5,688 5,564 12 14 25.0 Second....................................... 6,274 6,860 7,904 7,933 9 15 26.4 Middle....................................... 8,129 9,493 11,368 11,084 17 20 36.3 Fourth....................................... 12,490 15,074 18,061 16,908 21 20 35.4 ---------------------------------------------------------------------------------------------------------------- \1\ In 1989 dollars. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, and 1995. For most family types, the share of family income going to the bottom quintiles declined over the 1973-94 period while the share of income going to top quintiles increased (table H-20). Again, this generalization is less true for elderly units. TABLE H-20.--SHARES OF FAMILY CASH INCOME, BY INCOME QUINTILE AND FAMILY TYPE, SELECTED YEARS 1973-94 [In percent] ------------------------------------------------------------------------ Year Family type and quintile ------------------------------- 1973 1979 1989 1994 ------------------------------------------------------------------------ All families: Lowest.............................. 4.0 3.9 3.6 3.3 Second.............................. 10.2 10.0 9.2 8.8 Middle.............................. 17.1 16.6 15.7 15.2 Fourth.............................. 25.0 25.1 24.5 24.6 Highest............................. 43.7 44.4 47.1 48.1 All families with children: Lowest.............................. 5.8 5.1 4.0 3.7 Second.............................. 12.9 12.2 10.8 10.2 Middle.............................. 18.1 18.2 17.3 16.9 Fourth.............................. 24.1 24.6 24.8 25.1 Highest............................. 39.1 39.9 43.0 44.1 Married couples with children: Lowest.............................. 7.9 7.3 6.5 6.1 Second.............................. 13.8 13.7 12.8 12.4 Middle.............................. 18.0 18.3 17.7 17.7 Fourth.............................. 23.3 23.6 23.7 24.1 Highest............................. 37.0 37.1 39.3 39.7 Single mothers with children: Lowest.............................. 4.7 4.2 3.2 3.6 Second.............................. 10.6 10.1 8.5 8.6 Middle.............................. 16.0 16.4 14.9 14.8 Fourth.............................. 23.9 24.8 24.6 24.6 Highest............................. 44.8 44.5 48.6 48.4 Nonelderly childless units: Lowest.............................. 3.8 3.8 3.4 2.9 Second.............................. 10.4 10.2 9.4 8.9 Middle.............................. 16.8 16.4 15.6 15.3 Fourth.............................. 24.8 24.7 24.2 24.4 Highest............................. 44.2 44.8 47.4 48.5 Nonelderly childless families: Lowest.............................. 6.6 6.5 5.7 5.5 Second.............................. 12.8 13.0 12.0 11.9 Middle.............................. 17.8 18.0 17.3 17.4 Fourth.............................. 23.9 23.8 24.0 24.2 Highest............................. 38.9 38.7 40.9 41.0 Nonelderly unrelated individuals: Lowest.............................. 3.3 3.7 3.3 2.8 Second.............................. 9.7 10.6 10.0 9.3 Middle.............................. 16.5 17.1 16.3 15.9 Fourth.............................. 24.9 24.8 24.3 24.4 Highest............................. 45.6 43.8 46.1 47.7 Elderly childless units: Lowest.............................. 4.8 4.9 4.6 4.6 Second.............................. 8.7 8.8 8.4 8.9 Middle.............................. 13.3 14.0 13.5 13.8 Fourth.............................. 21.3 22.3 21.9 21.7 Highest............................. 51.9 50.0 51.6 50.9 Elderly childless families: Lowest.............................. 6.0 6.1 5.6 6.1 Second.............................. 10.2 10.8 10.1 10.7 Middle.............................. 14.5 15.4 14.8 15.1 Fourth.............................. 22.0 22.5 22.0 21.8 Highest............................. 47.3 45.2 47.4 46.3 Elderly unrelated individuals: Lowest.............................. 6.3 6.5 6.3 5.9 Second.............................. 10.9 10.3 10.1 10.3 Middle.............................. 14.4 13.9 14.0 14.3 Fourth.............................. 20.4 20.7 21.3 20.5 Highest............................. 47.9 48.7 48.2 49.0 ------------------------------------------------------------------------ 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 1995. Income Trends Year By Year Tables H-21 and H-22 show average pretax AFI and average family cash income by type of family and income quintile for selected years between 1973 and 1994. TABLE H-21.--AVERAGE PRETAX AFI (INCOME AS A MULTIPLE OF POVERTY) BY FAMILY TYPE AND INCOME QUINTILE, SELECTED YEARS 1973-94 ---------------------------------------------------------------------------------------------------------------- Year Family group ----------------------------------------------- 1973 1979 1989 1990 1993 1994 ---------------------------------------------------------------------------------------------------------------- All families: Lowest...................................................... 0.93 0.92 0.86 0.83 0.74 0.77 Second...................................................... 1.97 2.09 2.09 2.03 1.89 1.93 Middle...................................................... 2.85 3.09 3.27 3.18 3.03 3.10 Fourth...................................................... 3.94 4.31 4.77 4.64 4.53 4.61 Highest..................................................... 6.86 7.36 8.84 8.55 8.38 8.57 ----------------------------------------------- Total..................................................... 3.31 3.55 3.97 3.85 3.72 3.80 =============================================== All families with children: Lowest...................................................... 0.91 0.85 0.74 0.71 0.63 0.66 Second...................................................... 1.91 1.96 1.87 1.80 1.67 1.73 Middle...................................................... 2.67 2.85 2.93 2.80 2.71 2.79 Fourth...................................................... 3.55 3.84 4.14 4.00 4.00 4.09 Highest..................................................... 5.72 6.11 7.20 6.94 7.03 7.14 ----------------------------------------------- Total..................................................... 2.95 3.12 3.38 3.25 3.21 3.28 =============================================== Married couples with children: Lowest...................................................... 1.19 1.20 1.14 1.11 1.03 1.06 Second...................................................... 2.15 2.30 2.34 2.26 2.20 2.26 Middle...................................................... 2.86 3.13 3.34 3.22 3.24 3.31 Fourth...................................................... 3.72 4.11 4.52 4.42 4.51 4.58 Highest..................................................... 5.93 6.38 7.67 7.43 7.57 7.68 ----------------------------------------------- Total..................................................... 3.17 3.42 3.80 3.69 3.71 3.78 =============================================== Single mothers with children: Lowest...................................................... 0.33 0.33 0.25 0.25 0.25 0.25 Second...................................................... 0.72 0.75 0.64 0.61 0.58 0.62 Middle...................................................... 1.05 1.22 1.15 1.09 1.04 1.11 Fourth...................................................... 1.67 2.01 2.03 1.95 1.88 1.94 Highest..................................................... 3.32 3.67 4.15 3.90 3.99 4.02 ----------------------------------------------- Total..................................................... 1.42 1.60 1.64 1.56 1.55 1.59 =============================================== Nonelderly childless units: Lowest...................................................... 1.21 1.23 1.19 1.16 0.99 1.00 Second...................................................... 2.79 2.88 2.94 2.89 2.63 2.68 Middle...................................................... 4.04 4.22 4.45 4.37 4.10 4.20 Fourth...................................................... 5.42 5.70 6.29 6.12 5.91 6.04 Highest..................................................... 8.83 9.23 10.94 10.61 10.35 10.66 ----------------------------------------------- Total..................................................... 4.46 4.65 5.16 5.03 4.80 4.92 =============================================== Nonelderly childless families: Lowest...................................................... 1.73 1.84 1.80 1.81 1.61 1.68 Second...................................................... 3.28 3.56 3.68 3.66 3.41 3.52 Middle...................................................... 4.48 4.85 5.20 5.13 4.92 5.05 Fourth...................................................... 5.82 6.26 7.03 6.86 6.71 6.90 Highest..................................................... 9.22 9.84 11.72 11.42 11.23 11.53 ----------------------------------------------- Total..................................................... 4.91 5.27 5.89 5.78 5.58 5.74 =============================================== Nonelderly unrelated individuals: Lowest...................................................... 0.50 0.60 0.61 0.58 0.46 0.47 Second...................................................... 1.47 1.69 1.83 1.74 1.59 1.57 Middle...................................................... 2.49 2.73 3.00 2.92 2.74 2.70 Fourth...................................................... 3.74 3.93 4.46 4.34 4.13 4.14 Highest..................................................... 6.78 6.88 8.49 8.12 7.89 8.08 ----------------------------------------------- Total..................................................... 3.00 3.17 3.68 3.54 3.36 3.39 =============================================== Elderly childless units: Lowest...................................................... 0.82 0.90 0.95 0.94 0.92 0.93 Second...................................................... 1.44 1.61 1.73 1.76 1.70 1.73 Middle...................................................... 2.11 2.42 2.64 2.67 2.51 2.52 Fourth...................................................... 3.22 3.60 4.02 3.98 3.72 3.74 Highest..................................................... 6.95 7.28 8.63 8.44 7.89 8.00 ----------------------------------------------- Total..................................................... 2.91 3.16 3.59 3.56 3.35 3.38 =============================================== Elderly childless families: Lowest...................................................... 1.03 1.13 1.20 1.22 1.19 1.20 Second...................................................... 1.76 2.00 2.15 2.19 2.08 2.11 Middle...................................................... 2.51 2.85 3.14 3.18 2.94 2.97 Fourth...................................................... 3.71 4.08 4.61 4.52 4.23 4.26 Highest..................................................... 7.58 7.83 9.54 9.29 8.59 8.69 ----------------------------------------------- Total..................................................... 3.32 3.58 4.13 4.08 3.81 3.85 =============================================== Elderly unrelated individuals: Lowest...................................................... 0.57 0.68 0.73 0.70 0.65 0.67 Second...................................................... 0.99 1.09 1.17 1.14 1.12 1.11 Middle...................................................... 1.31 1.46 1.62 1.63 1.57 1.62 Fourth...................................................... 1.85 2.19 2.47 2.47 2.32 2.34 Highest..................................................... 4.35 5.15 5.58 5.58 5.35 5.57 ----------------------------------------------- Total..................................................... 1.81 2.12 2.31 2.30 2.20 2.27 ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office tabulations of data for the March Current Population Survey, 1974, 1980, 1990, 1991, 1994, and 1995. TABLE H-22.--AVERAGE FAMILY INCOME BY INCOME QUINTILE AND FAMILY TYPE, SELECTED YEARS 1973-94 [In 1989 dollars] ---------------------------------------------------------------------------------------------------------------- Year Family group ----------------------------------------------------- 1973 1979 1989 1990 1993 1994 ---------------------------------------------------------------------------------------------------------------- All families: Lowest................................................ 6,061 5,994 5,866 5,649 5,033 5,194 Second................................................ 15,416 15,306 15,107 14,781 13,623 13,729 Middle................................................ 25,909 25,609 25,823 25,191 23,572 23,886 Fourth................................................ 37,946 38,680 40,374 39,269 37,870 38,493 Highest............................................... 66,364 68,230 77,716 75,429 73,908 75,434 ----------------------------------------------------- Total............................................... 30,341 30,764 32,978 32,063 30,801 31,347 ===================================================== All families with children: Lowest................................................ 10,529 9,369 7,714 7,317 6,342 6,843 Second................................................ 23,176 22,365 20,664 19,834 18,108 18,790 Middle................................................ 32,616 33,317 33,067 31,916 30,465 31,315 Fourth................................................ 43,426 44,940 47,217 45,964 45,501 46,412 Highest............................................... 70,420 72,971 81,966 79,427 80,319 81,430 ----------------------------------------------------- Total............................................... 36,034 36,592 38,127 36,890 36,147 36,958 ===================================================== Married couples with children: Lowest................................................ 15,450 15,148 14,606 14,186 13,260 13,564 Second................................................ 27,170 28,294 28,660 27,960 27,105 27,732 Middle................................................ 35,513 37,693 39,683 38,810 38,927 39,425 Fourth................................................ 45,783 48,616 53,106 52,275 53,084 53,798 Highest............................................... 72,842 76,547 88,168 85,483 87,429 88,576 ----------------------------------------------------- Total............................................... 39,352 41,260 44,846 43,741 43,961 44,619 ===================================================== Single mothers with children: Lowest................................................ 3,505 3,338 2,563 2,529 2,449 2,738 Second................................................ 7,931 8,122 6,737 6,499 6,074 6,626 Middle................................................ 11,922 13,136 11,803 11,238 10,382 11,349 Fourth................................................ 17,867 19,904 19,427 18,703 17,816 18,905 Highest............................................... 33,430 35,714 38,394 36,228 36,770 37,227 ----------------------------------------------------- Total............................................... 14,930 16,043 15,792 15,036 14,698 15,369 ===================================================== Nonelderly childless units: Lowest................................................ 5,809 5,863 5,727 5,425 4,555 4,584 Second................................................ 15,886 15,808 15,840 15,448 13,986 13,926 Middle................................................ 25,562 25,397 26,154 25,518 23,627 23,930 Fourth................................................ 37,670 38,217 40,549 39,503 37,492 38,140 Highest............................................... 67,136 69,142 79,550 77,006 73,968 76,026 ----------------------------------------------------- Total............................................... 30,412 30,886 33,565 32,578 30,726 31,321 ===================================================== Nonelderly childless families: Lowest................................................ 13,044 13,881 13,712 13,969 12,582 12,860 Second................................................ 25,352 27,773 28,880 28,802 26,988 27,670 Middle................................................ 35,256 38,599 41,716 41,203 39,872 40,477 Fourth................................................ 47,199 51,058 57,713 56,552 55,464 56,304 Highest............................................... 76,867 83,026 98,413 96,054 93,144 95,606 ----------------------------------------------------- Total............................................... 39,543 42,867 48,093 47,311 45,610 46,583 ===================================================== Nonelderly unrelated individuals: Lowest................................................ 2,948 3,504 3,522 3,362 2,659 2,710 Second................................................ 8,620 9,957 10,621 10,077 9,259 9,114 Middle................................................ 14,628 16,065 17,389 16,950 15,899 15,653 Fourth................................................ 22,105 23,330 25,849 25,189 23,988 23,985 Highest............................................... 40,555 41,215 49,182 47,167 45,801 46,855 ----------------------------------------------------- Total............................................... 17,770 18,814 21,315 20,546 19,521 19,663 ===================================================== Elderly childless units: Lowest................................................ 4,148 4,632 5,221 5,060 4,917 5,003 Second................................................ 7,556 8,367 9,665 9,724 9,523 9,674 Middle................................................ 11,628 13,325 15,446 15,702 15,021 14,964 Fourth................................................ 18,576 21,202 25,021 25,097 23,779 23,524 Highest............................................... 45,276 47,577 59,036 58,134 54,366 55,109 ----------------------------------------------------- Total............................................... 17,436 19,021 22,880 22,741 21,521 21,655 ===================================================== Elderly childless families: Lowest................................................ 7,083 7,864 8,940 9,138 9,052 9,084 Second................................................ 12,074 13,841 15,967 16,468 15,717 15,841 Middle................................................ 17,200 19,750 23,381 23,917 22,422 22,346 Fourth................................................ 26,124 28,889 34,869 34,665 32,363 32,259 Highest............................................... 56,136 57,963 75,091 73,345 67,748 68,613 ----------------------------------------------------- Total............................................... 23,723 25,661 31,657 31,503 29,460 29,629 ===================================================== Elderly unrelated individuals: Lowest................................................ 3,108 3,717 4,221 4,038 3,751 3,908 Second................................................ 5,393 5,932 6,806 6,616 6,508 6,755 Middle................................................ 7,114 7,963 9,414 9,468 9,139 9,417 Fourth................................................ 10,046 11,881 13,973 14,286 13,474 13,538 Highest............................................... 23,626 27,984 32,331 32,398 31,056 32,275 ----------------------------------------------------- Total............................................... 9,857 11,495 13,414 13,367 12,786, 13,179 ---------------------------------------------------------------------------------------------------------------- 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. Source: Congressional Budget Office tabulations of data from the March Current Population Survey, 1974, 1980, 1990, 1991, 1994, and 1995. REFERENCES U.S. Bureau of the Census. (1993). Money income of households, families, and persons in the United States: 1991. Current Population Reports (Series P-60, No. 180). Washington, DC: U.S. Government Printing Office. U.S. Bureau of the Census. (1996 and various years). Income, poverty, and valuation of noncash benefits, 1994. Current Population Reports (Series P-60, No. 189). Washington, DC: U.S. Government Printing Office. [Several publications from the P-60 Series were used in preparing the tables for this chapter. These include numbers 124, 140, 145, 149, 154, 157, 161, 166, 168, 174, and 180.]