(t)he data are on tax units rather than households, they do not include many government transfer payments, they are pre-tax rather than post-tax, they don't adjust for changes in household size, and they do not include nontaxable compensation such as employer-provided health insurance.After accounting for these things, one obtains a 36.7 percent increase in real median income over the period.
Monday, December 16, 2013
LIes, damn lies, and bogus income statistics
Greg Mankiw has a must-read post that describes very neatly how much of the talk about income and inequality is tainted by bogus income measures. To wit, a paper by Piketty and Saez, which has received a lot of attention the past couple of years, used tax data to show that real median income rose by only 3.2 percent between 1977 and 2007. But, because