Household Income and Poverty Levels: Policy Makers' Workbook
Key Issues for Policy Makers
Session Goals
- Understand the median income distribution for households with children
- Understand the relationship between household type and income
- Understand the relationship between household type and poverty
- Understand the relationship between median income and poverty rates
Introduction
The mix of income and poverty levels across the United States is a complex topic. Several factors contribute to household incomes. An in-depth study of incomes and poverty at the household level is far beyond the scope of a short policy primer on the topic. Researchers have created entire books on how people earn and use their incomes. The goal of this lesson is to focus on the key data needed to examine the distribution of income and poverty levels across the country and local areas.
Household Types
We find large differences in income levels between households based on a number of factors. One of the factors is the presence of children within the household. Since this discussion focuses on education, we will look at only households with children present. Another factor with both large differences in income and large social impacts is the type of household. For this discussion we use the United States Census Bureau’s definition of household types based on the head of the household. The three types of households are households headed by: a married couple (married), a single male with no spouse present (male), and a single female with no spouse present (female).
Measures of Community Wealth
To discuss income levels, we use two primary measurements: median income and percentage of households with incomes below set thresholds, including the federal poverty rate.
Why Use Median Incomes
More people are accustomed to the idea of averages when using a single number to represent a whole community of people. Mathematically, to compute the average, you add the incomes for all the households together and divide the total by the number of households. The problem with averages is they can be heavily affected by a handful of top earners. There can be a few households that have incomes hundreds or thousands of times more than the average. This can raise the average in a way that it no longer represents the typical household in a community since households don't share their wealth between them and a handful of households in a community having extreme wealth doesn't change how the vast majority of households live.
To avoid this complication, discussions of income data often use median incomes to represent the typical household in a community. The median income is found by lining up all the households by income from lowest to highest and picking the household right in the middle of the line to represent the entire community. This means adding one extremely wealthy household won’t move the value representing the community by very much since it is just one more household added to the end of the line. The difference in the median income from adding just one more household regardless of how wealthy will have only a trivial impact on which household is in the middle of the line. This makes median incomes a much better representation of communities’ incomes.
Navigating maps in session
At any time, you can click the magnifying glass at top left to jump to a city, state, or zip code. You can click the target button at bottom right to jump to your location. You can also navigate map by clicking, scrolling, and dragging.
Important Policy Considerations
Median Household Incomes
This map shows the median income for households with children in each school district across the country. As you can see, there is large variation in median incomes both across the country and within states.
You can click on a school district to see detailed information including a link to the district's information pages.
National Household Income Data
Household Type (with Children) | Median Income | Group as a Percentage of All Households w/Children | Percentage of Each Group Qualifying for Free or Reduced-Price Lunches |
|---|---|---|---|
Married Couple | $125,911 | 68% | 17% |
Male | $59,464 | 9% | 37% |
Female | $39,121 | 23% | 58% |
Income by Household Type 1
Differences in Median Incomes between Married and Female Households
This map shows the difference in median incomes computed by subtracting the median income for married households with children from the median income of female households with children. A negative value indicates female households with children have lower median incomes than the married households with children in that district. Some districts are missing from this map because they are missing one of these two values. The slider map below will allow you to examine the districts with missing values on this map.
The map on the left side of the slider shows the median income for married couple households with children in each school district. The map on the right side shows median income for female households. In every district, we see the median income for female households is lower than that for married couple households.
Median Incomes by Household Type: Married (left); Female (right)
Example Income Distributions Graph
Percentage of Households with Incomes below Benchmarks
In the example, 50 percent of female households have incomes below $30,000 while 29 percent of male households and only 2 percent of married couple households have similarly low incomes. With a little math, we can also compute the percentage of households over each set dollar amount. Only 6 percent of female households (100 percent ‒ 94 percent) and 8 percent of male households have incomes over $100,000. But 57 percent of married households have incomes over $100,000.
You can see this type of graphic for each school district by selecting the school district on any of the maps and clicking the "More Information" link in the pop-up window.
Poverty-level Data
Poverty Levels by Household Type: Married (left); Female (right)
