Rich get richer: U-M study shows changes in income, spending of America’s families
ANN ARBOR—Families with the highest incomes continue to experience increases in income at a higher rate than the average family, according to the University of Michigan’s Panel Study of Income Dynamics.
The study, which tracks employment, income, wealth, health, childbearing and development, and education, among many other factors, has followed the same families since 1968 and today released its 2015 wave of data.
The Panel Study of Income Dynamics, or PSID, shows that families in the 95th percentile of income saw a 5.8 percent increase in their incomes compared to a 2.9 percent increase in the median family income, which doesn’t even keep up with inflation.
These changes are slightly smaller than those found in the Census’ Current Population Survey, which shows increases of 5.2 percent for the median and 8.1 percent for the 95th percentile.
But the difference between the PSID and the Current Population Survey is that the PSID follows the same families over time whereas the Census’ survey examines the U.S. population at large.
“Because of the longitudinal nature of the PSID, we can evaluate families who have been the top income earners for decades, and whether they remain the top income earners today,” said David Johnson, director of the PSID and a research professor in the Survey Research Center at the U-M Institute for Social Research.
The 2015 wave of PSID represents 40 waves of data across nearly five decades, and includes information about multigenerational families, allowing researchers to follow a person’s economic mobility throughout their lives.
“There’s a big interest in what’s called ‘intergenerational mobility’—how your family was doing when you were a kid compared to how your family is doing now that you are grown up,” Johnson said. “These data can tell us how much the life chances of the nation’s youth are shaped by their parents’ and grandparents’ economic status.”
Other findings include:
- Average spending on household expenditures in 2015 was $43,400, a 2.6 percent increase since 2013.
- The largest component of families’ spending was housing, which represented 41 percent of total spending.
- The median family wealth increased by 12 percent since 2013, to a total of $60,500.
- The wealthiest families, those in the 95th percentile, experienced a 17 percent increase in wealth.
- Eight percent of adults were without health insurance, down from 13 percent in 2013.
- Nine percent of adults report having had cancer, up from 8 percent in 2013.
- In 2015, the PSID tracked 3,489 great grandchildren of other participants who were now heads of their households or spouses and partners. There were an additional 3,357 grandchildren and 5,424 children in the sample.
Main sponsorship for the PSID is provided by the National Science Foundation, National Institute on Aging and Eunice Kennedy Shriver National Institute of Child Health & Human Development.