Declining Family Incomes in the 1980s: New Evidence From Longitudinal Data.

This report employs a database developed by the Survey Research Center at the University of Michigan, known as the Panel Study on Income Dynamics, in an effort to analyze the decline in family incomes in the U.S. during the 1980s. The people in this panel study were drawn from two groups, one that was meant to be reflective of the population as a whole and another that oversampled the poor people population. This analysis is limited to prime-age adults, people who begin each decade between the ages of 22 and 48 and who end each decade between the ages of 32 and 58. These are the years in which people are responsible for their own well-being and in which they are most economically active. This study shows that, during a period of their lives when they are most likely to be improving their living standards, the percentage of prime-age adults losing ground increased dramatically. This is consistent with the increased inequality found in Census Bureau's Current Population Survey-based studies and with the popular perception that the 1980s were a time of great insecurity. This study also found that the pattern of family income growth was very different in the 1980s than was the experience in the 1970s.