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Trends in the Family Income Distribution by Race/Ethnicity and Income Source, 1988-2009.

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Family income sources remained similar across racial groups, with employment income dominating. However, racial income gaps widened in employment and transfer income, especially for lower earners.

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Area of Science:

  • Socioeconomics
  • Economic Inequality
  • Labor Economics

Background:

  • U.S. income inequality has risen dramatically, sparking research into family income trends.
  • Less is known about income sources for the bottom 99% and racial/ethnic disparities in these trends.

Purpose of the Study:

  • Examine changes in overall family income and its sources (employment, property, transfers).
  • Analyze trends across five income levels for white, black, and Hispanic families (1988-2009).
  • Contribute to literature on income trends and racial economic inequality.

Main Methods:

  • Utilized family-level data from the Current Population Survey (1988-2009).
  • Analyzed income composition across different family income percentiles.
  • Compared income trends for white, black, and Hispanic-headed families.

Main Results:

  • Employment income is the primary source for families above the 25th percentile across all racial groups.
  • Employment income increased in real dollars and as a percentage of total income for all groups.
  • While the overall racial income gap remained stable, specific components showed divergence: narrowing property income gaps (due to white declines), widening transfer income gaps (bottom 25%), and widening employment income gaps (top earners).
  • Wealth-accrued income remains a minor component for all groups, including the top 1%.

Conclusions:

  • Employment income trends show remarkable similarity across racial groups, forming the backbone of family income.
  • Despite similar employment income trends, widening disparities in transfer and employment income components contribute to persistent racial economic inequality.
  • Property income's role is minimal, with declines among white families narrowing racial differences in this specific income source.