Income Growth and its Distribution from Eisenhower to Obama: The Growing Importance of In-Kind Transfers (1959-2016)

James Elwell (), Kevin Corinth and Richard Burkhauser
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James Elwell: Joint Committee on Taxation

No 12757, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We provide the first survey-based look at levels and trends in income and its distribution from 1959 to 2016 by linking Current Population Survey data from 1967 through 2016 with decennial Census data for 1959. We find that the dramatic decline in the market income of the middle class (measured as the median American tax unit or the mean value of the middle quintile of American tax units) began in 1969. However, we find that this decline was more than offset by government tax and transfer programs – especially in-kind transfers. Conventional measures of median income and income inequality that exclude the market value of in-kind transfers will substantially understate the impact of government policies in offsetting the stagnation of median market income growth and the rise in market income inequality since 1969.

Keywords: market income; survey-based CPS data; income inequality; median income; long-term growth trends (1959-2016); valuing in-kind transfers; full-income series (search for similar items in EconPapers)
JEL-codes: C81 D31 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2019-11
New Economics Papers: this item is included in nep-ore
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Citations: View citations in EconPapers (5)

Published - published in D. Furchtgott-Roth (ed.), United States Trends in Income, Wealth, Consumption, and Well-Being; OUP, Oxford, 2020, 90-124.

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Working Paper: Income Growth and its Distribution from Eisenhower to Obama: The Growing Importance of In-Kind Transfers (1959-2016) (2019)
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