Unexpectedly Intriguing!
May 25, 2007

Using the distributions we previously created to model the cumulative representation of income-earning individuals by age group for both 1995 and 2005, we've now extracted the number of income-earners by annual income! First, here's the distribution we've modeled for 1995:

Modeled Number of Income-Earning Individuals by Annual Income in 1995

And here's the distribution we've modeled for the same age groups and constant 2004 U.S. dollar income range for 2005:

Modeled Number of Income-Earning Individuals by Annual Income in 2005

We'll be comparing each age group's distribution in a later post (and introducing a tool that will allow you to find the number of income earners within any income range from $0 to $95,000 constant 2004 U.S. dollars, but in the meantime, here's a direct comparison of the totals for each age group across our income spectrum:

Comparison in the Total Number of Income-Earning Individuals within Indicated Age Groups for 1995 and 2005

Here's something to think about over the Memorial Day Holiday - in this last chart, we see that a major demographic shift in the number of income-earning persons in the U.S. has occurred in this 10-year period, primarily in the Age 45-54 and Age 55-64 groups, which both saw the number of individuals within each age range leap by 34.6% and 38.2% respectively. Meanwhile, we see that by comparison, the number of income-earning individuals in the other age ranges were either flat or saw moderate decreases.

Since we've already established that the Age 45-54 range for both 1995 and 2005 represents the peak earning years for U.S. individuals, what do you suppose the effects of this demographic change would be upon the distribution of income within the United States during this period? In other words, what effect would this change within the U.S. workforce have upon income inequality in the United States?

Update: For the curious, the two charts at the top of this post show the number of individuals within each consecutive $100 interval from $0 to $95,000 in constant 2004 U.S. dollars!

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