Or is it? Could the coronavirus pandemic of 2020 have caused the outsized increase in median household income in 2019? It doesn't seem possible, but the answer is yes, according to Census Bureau analysts Jonathan Rothbaum and Adam Bee. Here's why...
The Census Bureau fields the Annual Social and Economic Supplement to the Current Population Survey in March of each year, with respondents asked to report their income for the previous year. The income statistics for 2019 were collected in March 2020—in the middle of the coronavirus pandemic. Not surprisingly, survey response rates were abnormally low—10 percentage points lower in March 2020 than in the same month of 2019. When Rothbaum and Bee analyzed response rates by demographic characteristic, they discovered that higher-income households were more likely than lower-income households to respond to the CPS during the pandemic. This nonresponse bias inflated the estimate of household income.
After adjusting for nonresponse bias, median household income in 2019 is an estimated $66,790 rather than the published and official figure of $68,703. The adjustment reduces the 2018–19 increase in median household income to a more modest 3.9 percent rather than 6.8 percent.
The good news is that median household income in 2019 is still the highest on record, even after the adjustment for nonresponse bias. The 3.9 percent increase in median household income between 2018 and 2019 may not have been the biggest on record, but it was still pretty big—in the 93rd percentile of annual increases. "The adjusted estimates would indicate that 2019 (from the 2020 CPS ASEC) was still a very good year for income," the researchers conclude.
Source: Census Bureau, Coronavirus Infects Surveys, Too: Nonresponse Bias during the Pandemic in the CPS ASEC
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