Changes in the Functional Distribution of Household Income in Washington: A Comparison using 1990 and 2000 PUMS Census Data

This paper examines and details the main sources of household income in Washington using the Census of Population PUMS microsample. In accord with the generally good economy in the 1990’s, the share of property type income in total household income increased from 1990 to 2000. And with welfare reform in the mid-1990’s the share of public assistance type income decreased as a share of household income. In order to better understand the relative importance of alternative sources of income to Washington households, each household was identified according to the income source which provided the largest contribution to household income. For example, a household whose largest source of income comes from salary and wages was identified as a Labor household. Similarly, households whose largest source of income was interest, dividends or net rentals were identified as Capital households. Labor and capital households are not very different in terms of mean household income. In 2000, average household income of Labor households was $65,300 while the average household income of Capital households was $96,200. However, Labor households were very different than Capital household regarding diversification of income source. Labor households depended upon wage income for 92 percent of mean household income. Capital households obtained 70 percent of their mean household income from interest, dividends and rents, but also had 11 percent of their mean income from wages and 15 percent of their mean income from social security and pensions.