Proportion of higher income families declines during the 1969-82
The proportion of families earning $25,000 or more after inflation
decreased to 39 percent in 1982, after remaining constant at about 45
percent in 1969 and 1976, according to the 1983 Survey of Consumer
Finances. This change in the distribution of real income reflects
changes in the economy and in the size of families. For example, both
1969 and 1982 were recession years, and the number of families
maintained by unmarried persons increased over the 1969-82 period,
causing a decrease in average family size and, therefore, reduced family
The older the head of the household, the more the average family
income. Incomes ranged from $13,835 when the household head was under
age 25 to nearly $33,000 when the head was in the 45- to 54-year-old
group. 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 the
family income. Income was lowest in families maintained by persons with
an eighth grade education or lower, and rose consistently with each
level of attainment. Families maintained by a professional, technical,
or manageral worker averaged higher incomes than those maintained by
other workers. Incomes also tended to be higher when the family head was
white. As might be expected, the lowest income was in households
maintained by unmarried persons with children, followed by households
maintained 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 to
the high mortgage interest rates in recent years, as well as to the
increase in the number of families headed by unmarried persons.
Families maintained by persons 45 years and over were most likely to own
their homes; those maintained by persons under age 35 were least likely.
The survey questioned homeowners about the current market value of
their homes and about the outstanding mortgage debt. From the
responses, home equity was determined. The average real value of homes
increased from $53,190 in 1970 to $72,238 in 1980. During the same
period, 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 the
lower holdings in 1970 and 1983, as families used liquid assets to meet
shortfalls in income.
The proportion of owners of liquid holdings and the dollar amount
of holdings, of liquid assets increased with family income. For
example, slightly more than half (53 percent) of the families with
incomes under $5,000 had liquid assets in 1983, while nearly all (99
percent) of those with incomes of at least $30,000 had such assets.
The 1983 Survey of Consumer Finances was jointly sponsored by the
Board of Governors of the Federal Reserve System, Department of Health
and Human Services, Federal Deposit Insurance Corporation, Comptroller
of the Currency, Federal Trade Commission, Department of Labor, and U.S.
Treasury. Personal interviews of 3,824 families were conducted by the
University of Michigan’s Survey Research Center. The individual
selected as the respondent for each family was either the head of the
family, or, for married couples, the person most knowledgeable about
This summary is from the report “Survey of Consumer Finances,
1983.’ Federal Reserve Bulletin, September 1984. Future articles
based on survey results will examine family debts and the financial
behavior of high income families.