How Much Money Did The Usa Make In 2018

Survey Redesigns Make Comparisons to Years Earlier 2017 Difficult

Jonathan Rothbaum and Ashley Edwards

The U.S. median household income was $63,179 in 2018, not statistically different than the previous year, according to U.S. Census Bureau statistics released today.

At beginning glance, it would appear that median income was higher than every year prior to 2017, surpassing the median income for 2007 ($sixty,985 in 2018 dollars) and 1999 ($61,526 in 2018 dollars).

In 2017, the median income was $62,626, non statistically different from 2018. And so, making comparisons prior to 2017 requires circumspection, since recent estimates reflect changes implemented to the survey.

Income questions were redesigned in the 2014 CPS ASEC for data year 2013 and the processing system was updated in the 2019 CPS ASEC for data yr 2018.

As a result, some of the differences over fourth dimension could be due to these contempo survey improvements.

Changing Questions

To empathise differences in estimates due to the questionnaire modify, the 2014 CPS ASEC used a split console design which asked both traditional and redesigned income questions (meet Appendix D of the 2014 Income and Poverty report for estimates).

Likewise, to understand the impact of the new processing system in the 2019 CPS ASEC, the Census Bureau re-released data from 2017, with one set of estimates reflecting the legacy processing system and one set up based on the updated processing system (as discussed in working papers on income and poverty estimates).

These survey changes afflicted estimates of median household income and income and poverty estimates for some subgroups.

For each change, the percentage deviation in median household income is shown beneath. The new questionnaire led to a 3.17% increment in median income, while the touch on of the new processing system was not statistically pregnant.

What Happens When Changes Are Not Taken Into Account

Without adjusting for these changes, 2018 has higher median household income than each year prior to 2017.

One mode to make pre-improvement estimates comparable to electric current data could be to conform them up or down by the pct departure of each comeback:

For income in 2017 and 2018, the information don't demand adjusting every bit estimates are available with the redesigned questionnaire and the updated processing organization.
For income in 2013 to 2016, the estimates are adjusted by the percentage divergence in the 2018 processing update, -0.38%.
For income in 2012 and before, the estimates would be adapted for both data improvements, and the magnitude of the adjustment would be equal to ii.77%.

The 2.77% adjustment comes from using the 3.17% and -0.38% differences shown higher up: (1 + 0.0317)*(1 – 0.0038) = (1+0.0277).

Without the adjustment, income in 2018 is significantly college than all years shown prior to 2017. All the same, with the adjustment, it is higher than all the pre-2017 years except 2007, 2000 and 1999.

How Changes Bear on Poverty Measures

Because income is used to determine poverty status, changes to income can also impact poverty statistics.

While overall poverty rates were not statistically changed by either of these survey improvements, the changes did touch on poverty estimates for some demographic groups.

The same method tin can be practical to compare poverty statistics for subgroups whose poverty estimates were affected by the redesign.

For the poverty rate amongst individuals in families headed by a female with no spouse present in 2013 to 2016, estimates are adjusted by 0.vi percentage points.

For the same group in 2012 and prior, the adjustment would be 1.viii percent points.

These adjusted estimates testify that poverty was lower for this grouping in 2018 than in all other available years.

These adjustments are not made in our official publications and table packages because it requires the assumption that the impact of the survey changes would have been identical in all years, an assumption that is less likely to exist accurate in years further away from these methodology changes.

While the CPS ASEC provides income statistics, another source of income data is the American Community Survey, which provides consistent statistics back to 2005.

Jonathan Rothbaum is chief of the Income Statistics Branch and Ashley Edwards is master of the Poverty Statistics Co-operative, both in the Social, Economical and Housing Statistics Division.