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More charts and commentary based on this week’s Census Bureau report on income – Publications – AEI

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AEI More charts and commentary based on this week’s Census Bureau report on income The Census Bureau released its annual report this week on “Income and Poverty in the United States: 2018” with lots of new, updated data on household and family incomes, household demographics and poverty statistics through 2018. I posted two reports on the new Census Bureau report this week on CD here and here. Below are some additional charts with commentary based on the new household income data through 2018. Median Household Income, Average Household Size and Income per Householder. The top chart above shows: a) median US household income (in constant 2018 dollars) and b) the average household size in each year from 1967 to 2018. The size of the average US household has declined steadily over time and

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More charts and commentary based on this week’s Census Bureau report on income

The Census Bureau released its annual report this week on “Income and Poverty in the United States: 2018” with lots of new, updated data on household and family incomes, household demographics and poverty statistics through 2018. I posted two reports on the new Census Bureau report this week on CD here and here. Below are some additional charts with commentary based on the new household income data through 2018.

More charts and commentary based on this week’s Census Bureau report on income - Publications – AEI More charts and commentary based on this week’s Census Bureau report on income - Publications – AEI

Median Household Income, Average Household Size and Income per Householder. The top chart above shows: a) median US household income (in constant 2018 dollars) and b) the average household size in each year from 1967 to 2018. The size of the average US household has declined steadily over time and fell to an all-time low last year of 2.52 members. That’s a decline of more than one household member since 1967 where the average household size was 3.56 persons. On a percentage basis, that’s more than a 29% decline in the size of the average US household. Obviously the shrinking size of the average US household distorts a comparison of median household incomes over time in different years that have a different average number of household members. In economic terms, the ceteris paribus assumption of holding everything constant is violated since household size is not constant over time, but decreasing.

The second chart above adjusts for the declining average household size and compares the percent increases over time in: a) real median household income and b) real median household income per household member from 1967 to 2018. Over that period, inflation-adjusted median household income has increased by 37.8% from $45,861 in 1967 to $63,179 last year, while household income per household member increased by 79.3% from $13,982 in 1967 to $25,071 in 2018. That’s quite a difference — the percent increase in household income per household since 1967 is more than twice the percent increase in real household income over the last half century.

Bottom Line: Because the average size of a US household has steadily declined over time and reached an all-time low in 2018 of 2.52, the increase in real household income since 1967 of 37.8% significantly understates the increase in real income per household member of a much larger (by a factor of 2X) 79.3% over the last half century.

More charts and commentary based on this week’s Census Bureau report on income
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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