Income of the American People

Income of the American People

Income of the American People

Income of the American People

Excerpt

The importance of statistics on income distribution is attested by the inclusion of information on income in the Population Censuses of 1940 and 1950 and, annually, in the Current Population Surveys since 1944. Of the many topics that compete for a place in census inquiries, only a limited list can be finally chosen for the collection of data. The selection of topics depends on evidence of extensive need for the particular facts on a broad population base. The question on income was added to the 1940 Census upon the recommendation of scholars and research analysts representing many different fields of study which require information on the distribution of income. The diversity in the amount of information required among the various fields of study was then, and still remains, so great that only a census or a large sample from the census could supply the basic facts. The decision to include a question on income in the 1940 Census was made shortly after an inventory of existing information on income distribution had revealed that the fragmentary, inconsistent, and inadequate information compiled from scattered surveys could not possibly serve the growing needs for data on income distribution. The income data provided as a by-product of sample survey investigations on various subjects did not cover a sufficient number of localities for market analysis and studies of housing, education and other topics which must be related to the individual locality. It was not possible to collate information on the income distribution at different dates for use in the analysis of population trends and of changes in the characteristics of the labor force. Very little knowledge of the incomes of specific population groups needed for the examination of problems of social welfare could be gleaned from the scattered sample survey data.

The evaluation of administrative records as a source of information on income distribution was equally discouraging in 1939. Tax statistics did not provide adequate data for the lower income brackets; social insurance records did not supply information on the higher income brackets. Neither source provided the information on family incomes which is necessary for the study of consumer behavior. The lowering of income tax exemptions has contributed to the generality of tax statistics, but otherwise the situation has not changed since 1939. Data from administrative records can supply information on only a part of the income distribution.

The income information in the 1940 Census was limited to wages and salaries, chiefly for reasons of feasibility. At that time little was known about the inaccuracies of income reported in interviews and about the . . .

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