Median income1 of families with children is a good starting point for assessing the economic well-being of children since it measures the ability of a family at the midpoint of the income distribution to purchase food, shelter, clothing, child care, and other basic goods and services required to raise children.2
However, median family income fails to capture important economic resources that may also be available to a family, such as employer-paid health benefits, Medicaid, or Food Stamps; moreover, it says nothing about changes in the distribution of income across families. For a more complete picture of children’s economic well-being, it is necessary to look at several measures of economic well-being, including those in the following sections.
Median Family Income of All Families with Children. Between 1975 and 1998, median income of all families with children (in constant 1998 dollars)3 increased gradually from $41,304 in 1975 to $45,442 in 1998 (see Table ES 1.1).4
Median Family Income by Family Type. Throughout the period from 1975 through 1998, median income of mother-only families has never exceeded 35 percent of median income of two-parent families (see Figure ES 1.1). In 1998, the median family income of mother-only families was $18,409, compared with $57,022 for married-couple families with children. During the same time period, the median income of father-only families never exceeded 62 percent of median income of two-parent families (see Figure ES 1.1). In 1998, median income of father-only families was $30,869.
Differences in Median Family Income by Race and Hispanic Origin. Median family incomes are substantially higher for white families with children than for black or Hispanic families with children. In 1998, whites enjoyed median family incomes that were about 89 percent higher than those of black families and 76 percent higher than those of Hispanic families (see Table ES 1.1).
Table ES 1.1 Median income of families in the United States with related children under age 18, by race and Hispanic origina and family structure (in constant 1998 dollars):b Selected years, 1975-1998
a Persons of Hispanic origin may be of any race. Estimates for whites and blacks include persons of Hispanic origin.
b Income statistics converted to constant 1998 dollars using the CPI-U-X1 (all items) price index. CPI-U-X1 is a rental equivalence approach to homeowners’ costs for the consumer price index prior to 1983, the first year for which the official index (CPI-U) incorporates such a measure.
Sources: Unpublished tabulations of the March Current Population Survey supplied by U.S. Bureau of the Census; U.S. Bureau of the Census, Current Population Survey, Annual Demographic Survey: March Supplement, Table FINC-04 available online at www.census.gov/hhes/income/histinc.html; Council of Economic Advisors, 1997. Economic Report of the President, 1997, Table B-58; U.S. Bureau of the Census, 1998. Current Population Reports, Money Income (with separate data on valuation of noncash benefits), Table B-1. U.S. Bureau of the Census, Historical Income Tables — Families, Table F9, F10, F10A, F10B, F10C, available online at www.census.gov/hhes/income/histinc.html.8/9/00
Figure ES 1.1 Median income of families in the United States with related children under age 18, by family structure (in constant 1998 dollars):a Selected years, 1975-1998
a Income statistics converted to constant 1998 dollars using the CPI-U-X1 (all items) price index. CPI-U-X1 is a rental equivalence approach to homeowners’ costs for the consumer price index prior to 1983, the first year for which the official index (CPI-U) incorporates such a measure.
Sources: Unpublished tabulations of the March Current Population Survey supplied by U.S. Bureau of the Census; U.S. Bureau of the Census, Current Population Survey, Annual Demographic Survey: March Supplement, Table FINC-04; 1/20/99; Council of Economic Advisors, 1997; U.S. Bureau of the Census, 1998.
1 Median income is the amount that divides the income distribution into two equal groups, half having incomes above the median, half having incomes below the median.
2 When median family income is rising, the likelihood is that children in a typical family are enjoying a rising standard of living.
3 In constructing income figures in constant 1998 dollars, we have followed the practice of the Bureau of the Census and used the CPI-U-X1 consumer price index. This index differs from the standard CPI-U index in its treatment of the costs of owner-occupied housing for years prior to 1986. After 1986, it is identical to the CPI-U.
4 However, this apparent stagnation was in part the result of a shift in the living arrangements of families with children. As shown in Table PF 2.1.A, between 1970 and 1997 the percentage of children living in female-headed families increased from 11 percent to 24 percent. Since, as will be described in the next section, female-headed families have much lower incomes than two-parent families, this shift in living arrangements depressed the median income of all families with children.
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