	Introduction

The distribution of income in the United States features heavily in congressional discussions about the middle class, program funding and effectiveness, new and existing target groups, government tax revenue, and social mobility, among other topics. Recently, the level and distribution of U.S. income have also been raised in the context of broader macroeconomic issues, such as economic growth. This report responds to that interest by providing a guide to various measures, indicators, and graphics commonly used to describe the U.S. income distribution. This report provides descriptive analysis of the U.S. income distribution to illustrate various concepts. This analysis reveals broad trends, but does not provide an exhaustive study of the distribution of income in the United States. Importantly, the report does not explore potential drivers and impacts of changes to the shape and span of the distribution. This report is organized as follows: first, it examines the complexities of income measurement and important definitional and data considerations to bear in mind when using and interpreting income statistics. An appendix presents information on the set of summary indicators of income dispersion reported annually by the U.S. Census Bureau. In practice, however, empirical analysis of the income distribution involves several choices about how income is defined and the level at which income data are examined. Income can be constructed narrowly (e.g., earnings only) or broadly (e.g., as the sum of earnings, capital gains, government transfers, and other sources). It can be presented in pre-tax status or reflect the taxes paid and tax credits received. For these reasons, disagreement over the interpretation of income levels and trends frequently centers on how income is defined. Level of Analysis

Income can be presented at the individual level or represent pooled resources among families, households, or tax units. Figure 3 shows the distribution of U.S. household income in 2013. In 2013, median household income was $51,939 and average household income was $72,641. Figure 4 shows the trend in median household income between 1993 and 2013. Median household income in 2013 was slightly higher than median household income in 1995 ($51,719 in 2013 dollars). Figure 9 compares quintile income shares across 1993, 2003, and 2013, and reveals growing concentration of U.S. household income at the top of the distribution over the past 20 years. The share of income among the top 20% of the distribution grew from 48.9% in 1993 to 49.8% in 2003 and to 51% in 2013. Gini Index

The Gini index is a popular summary measure of income dispersion that describes the relationship between the cumulative distribution of income and the cumulative distribution of the population, a relationship depicted by the Lorenz curve. It was 0.476 in 2013. CBO data indicate a wide range of incomes at the top of the income spectrum. These indicators differ from the measures described in the main body of this report in that they do not convey descriptive details on the experience of the typical household, the range of incomes, or the shape of the distribution, but instead use information on the full distribution to characterize overall income dispersion (i.e., they are relative measures used to assess departure from a perfectly equal distribution of income).
The distribution of income in the United States features heavily in congressional discussions about the middle class, program funding and effectiveness, new and existing target groups, government tax revenue, and social mobility, among other topics. Recently, the level and distribution of U.S. income have also been raised in the context of broader macroeconomic issues, such as economic growth. Accordingly, Congress has sought information on the absolute and relative experience of U.S. households, the range of incomes, and their dispersion.
Describing the income distribution involves several important choices about the definition of income and the level at which income data are examined. Income can be constructed narrowly (e.g., earnings only) or broadly (e.g., as the sum of earnings, capital gains, government transfers, and other sources); it can be presented in pre-tax status or reflect taxes paid and tax credits received. Income can be presented at the individual level or represent pooled resources among households, families, or tax units. These choices about how to define income affect the magnitude of income indicators and the shape and range of the U.S. income distribution. For this reason, disagreement over the interpretation of income levels and trends frequently centers on how income is defined.
This report is a guide to various measures, indicators, and graphics commonly used to describe the U.S. income distribution. It examines the complexities of income measurement, outlines important definitional and data considerations to bear in mind when using and interpreting income statistics, and reviews descriptive statistics commonly used in analysis. It also discusses the Gini index, a popular summary measure of income dispersion and an appendix presents information on additional summary indicators of income dispersion reported annually by the U.S. Census Bureau.
The report provides descriptive analysis of the U.S. income distribution to illustrate various concepts and data presentation strategies. This analysis reveals broad trends, but does not provide an exhaustive study of the distribution of income in the United States. Importantly, the report does not explore potential drivers and impacts of changes to the shape and span of the distribution.
Census data show a gap in income between households at the top of the distribution and those in the middle and bottom of the distribution. In 2013, household income at the 90th percentile was $150,000, whereas household income at the 10th percentile was $12,401. Said another way, household income at the 90th percentile was 12.1 times the level of household income at the 10th percentile. Median household income in 2013 was $51,939, up from $49,594 in 1993 (in 2013 dollars).
Census data reveal growing concentration of income at the top of the distribution between 1993 and 2013. Households in the top 20% of the distribution earned 51% of total household income in 2013, compared to 48.9% in 1993 (an increase of 4.3%). The share of total income among the bottom 20% of households was 3.2% in 2013 and 3.6% in 1993 (a decrease of 11.1%). In addition, Census calculations indicate that the Gini index increased from 0.454 in 1993 to 0.476 in 2013, indicating increased dispersion of household income.