Proportion of higher income families declines during the 1969-82period The proportion of families earning $25,000 or more after inflationdecreased to 39 percent in 1982, after remaining constant at about 45percent in 1969 and 1976, according to the 1983 Survey of ConsumerFinances.
This change in the distribution of real income reflectschanges in the economy and in the size of families. For example, both1969 and 1982 were recession years, and the number of familiesmaintained by unmarried persons increased over the 1969-82 period,causing a decrease in average family size and, therefore, reduced familyincome. The older the head of the household, the more the average familyincome. Incomes ranged from $13,835 when the household head was underage 25 to nearly $33,000 when the head was in the 45- to 54-year-oldgroup. Family incomes fell for each age group thereafter–reaching$11,335 for households headed by persons age 75 or older. Occupation, education, and race played a key role in family income.The higher the educational attainment of the family head, the higher thefamily income.
Income was lowest in families maintained by persons withan eighth grade education or lower, and rose consistently with eachlevel of attainment. Families maintained by a professional, technical,or manageral worker averaged higher incomes than those maintained byother workers. Incomes also tended to be higher when the family head waswhite. As might be expected, the lowest income was in householdsmaintained by unmarried persons with children, followed by householdsmaintained by retirees. About 60 percent of the nonfarm families owned their homes in 1983,down from 65 percent in 1977. The decrease can be partly attributed tothe high mortgage interest rates in recent years, as well as to theincrease in the number of families headed by unmarried persons.Families maintained by persons 45 years and over were most likely to owntheir homes; those maintained by persons under age 35 were least likely. The survey questioned homeowners about the current market value oftheir homes and about the outstanding mortgage debt.
From theresponses, home equity was determined. The average real value of homesincreased from $53,190 in 1970 to $72,238 in 1980. During the sameperiod, real equity increased from $37,853 to $56,133. Total assets (in 1983 dollars) increased over the 1970-83 period.Average holdings of liquid assets were $11,274 in 1970, $15,224 in 1977,and $12,934 in 1983.
The 1969 and 1982 recessions attributed to thelower holdings in 1970 and 1983, as families used liquid assets to meetshortfalls in income. The proportion of owners of liquid holdings and the dollar amountof holdings, of liquid assets increased with family income. Forexample, slightly more than half (53 percent) of the families withincomes under $5,000 had liquid assets in 1983, while nearly all (99percent) of those with incomes of at least $30,000 had such assets. The 1983 Survey of Consumer Finances was jointly sponsored by theBoard of Governors of the Federal Reserve System, Department of Healthand Human Services, Federal Deposit Insurance Corporation, Comptrollerof the Currency, Federal Trade Commission, Department of Labor, and U.
S.Treasury. Personal interviews of 3,824 families were conducted by theUniversity of Michigan’s Survey Research Center. The individualselected as the respondent for each family was either the head of thefamily, or, for married couples, the person most knowledgeable aboutfamily finances. This summary is from the report “Survey of Consumer Finances,1983.
‘ Federal Reserve Bulletin, September 1984. Future articlesbased on survey results will examine family debts and the financialbehavior of high income families.