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Why Current Definitions of Family Income Are Misleading, and Why this Matters

What is "family income" and how does its definition and measurement affect estimates of income inequality in the United States? Nancy Folbre addresses these questions in a brief research note published by Washington Center for Equitable Growth. In the essay, she explains how the value of non-market work and intra-family transfers (typically omitted from consideration) lead to significant differences in the living standards of families with exactly the same market income.

>> Read essay published by Washington Center for Equitable Growth

Researchers studying income distribution in the United States seem reluctant to acknowledge the family as an important unit of production and distribution. As a result, they often rely on statistics that provide a misleading picture of inequalities based on class, race or ethnicity, and especially gender.

Incomplete definitions of both family and income either obscure or render invisible transfers between and within households, including the value of housework and family care. Evidence from specialized surveys—such as the Health and Retirement Survey, the Panel Survey of Income Dynamics, the Survey of Income and Program Participation, and the American Time Use Survey—clearly demonstrate the quantitative relevance of these omissions.

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