ECONOMIC

Since families typically pool their incomes, the distribution of family incomeis a particularly useful indicator of the distribution of economic well-being.One common measure of inequality shows the percentage share of aggregatemoney income before taxes received by each fifth of families ranked byincome. Quite remarkably, relative income shares measured in this way havehardly varied in the 25 years between 1947 and 1972 (Table 34). Thus in arelative sense the rich were not getting richer and the poor were not gettingpoorer. In this period the average income of each quintile increased at muchthe same rate. If anything, there seems to have been a slight tendencytowards greater equality, since the share of measured income received by thetop 5 percent declined somewhat from 1947 to 1972. The decline in theincome share of. the top 5 percent may be a consequence of the seculardecrease in the share of national income received by the owners of nonlaborfactors of production.TABLE 34.—Share of aggregate income before taxes received by each fifth of families, ranked byincome, selected years, 1947-72 l[Percent]Income rank19471950196019661972Total families100.0100.0100.0100.0100.0Lowest fifthSecond fifthThird fifthFourth fifthHighest fifth5.111.816.723.243.34.511.917.423.642.74.812.217.824.041.35.612.417.823.840.55.411.917.523.941.4Top 5 percent17.517.315.915.615.9iThe income (before taxes) boundaries of each fifth in 1972 were: lowest fifth—under $5,612; second fifth—$5,612-$9,299; third fifth—$9,300-$12,854; fourth fifth—$12,855-$17,759; highest fifth—$17,760 and over; top 5 percent—$27,837 and over. Income includes wages and salaries, proprietors' income, interest, rent, dividends, and money transferpayments.Note.—Detail may not add to totals because of rounding.Source: Department of Commerce, Bureau of the Census.The general impression that no significant trend has developed in therelative inequality of income among families is confirmed by other measuresof inequality. For example, the variance of the natural logarithm ofincome, a measure which takes into account dispersion throughout all rangesof income, shows no trend in the dispersion of family income throughoutthe post-World War II period. (See the supplement to this chapter for anexplanation of this measure.)A family's income depends on the amount of work the different familymembers perform, on the earnings they receive, on the monetary return fromproperty owned by the family, and on transfers received from the government.Underlying the distribution of family income then is the distribution ofindividuals' incomes. For males 35 to 44 years old or those 25 to 64 there isno trend during the post-World War II period in income inequality. However,in all years inequality is greater for the 25-64 age group than for the35-44 age group, and this reflects the change in earnings with age. Thus,measures of inequality for broad age groups merge the inequality resulting140