Family Income at the Bottom and at the Top: Income Sources and Family Characteristics.

Attention has recently been focused on wealth as a source of long-term economic security and on wealth ownership as a crucial aspect of the racial economic divisions in the United States. This literature, however has been concerned primarily with the wealth gap between poor and middle-class families, and between the white and black middle class. In this paper, we investigate the incomes of families at the top and bottom of the family income distribution. We examine the sources of income and the demographic characteristics of these high-income and low-income families using family level data from the 1988-2003 Current Population Surveys.We find that, at the bottom of the distribution, transfer income is the major income source; in particular, income from social security, supplemental security, and public assistance. At the top, employment income is the largest component of family income. Non-white, female, and non-married householders are disproportionately located at the bottom of the family income distribution. These families consist of both young and old adults, with high-school educations or less, in low-level service occupations. Many are disabled, many are retired. Householders at the top of the income distribution are typically male, white, and married. Householders and spouses at the top are typically middle-age, with college educations, employed in professional service and managerial occupations.We find that wealth is not an important source of income for families at the highest percentiles. The highest income families during this period in the U.S. were not a "property elite": their income is mostly from employment. We speculate, however, that they will join the "property elite" later in the life-course as they retire and receive income from their investments.