Racial Differences in Per Capita Income, 1960–76: The Importance of Household Size, Headship, and Labor Force Participation

Abstract

Racial differences in average per capita income are decomposed, as are changes over time for both races. The 1960-76 decline in household size accounted for 13 percent of the per capita income improvement of both races. Whereas real increases in earnings of husbands contributed most to improvements in well-being in husband-wife households, increases in income from sources other than earnings were most important to female headed households. During a period in which a growing proportion of both races resided in female headed households and racial differences in living arrangements widened, the per capita income of female headed households relative to husband-wife households declined.