Income

Income & Assets

Mature Women Income & Assets Variables

Respondents were asked numerous questions about their income, assets, and debts over the course of the surveys. While many researchers use income as the primary measure of the economic resources available to a respondent, users can draw a more complete picture of economic well-being by examining both income and wealth. Wealth, which is equal to a respondent's assets minus her debts, reflects the total financial resources available to the respondent.

Data Summary

In every survey year, respondents were asked about their income. Table MW1 presents the broad range of income questions asked since 1967, including wages, business and farm income, rental income, interest and dividends, public assistance support sources, and alimony. In early survey years, respondents were asked about the combined income of themselves and their husbands; in later years, respondents were asked separate questions on how much income they and their husbands received (pretax) from the various sources. Beginning in 1987, respondents were also asked about the income of their partners. In years when the entire survey was shortened, some income sources were combined into fewer questions; in years when a more in-depth survey was used, the questions were separated.

In addition to the in-depth questions about the income of the respondent and her husband or partner, respondents also provided their estimate for total income of all individuals in the family in some years, while in other years they were asked to estimate the total income of all individuals except their husbands and themselves. Finally, respondents have been asked in select years about their ability to get along on their family's income, with choices ranging from "always have money left over" to "can't make ends meet."

Correctly gauging respondent income is a complicated task. Respondents may misreport their total income due to the many sources of income and debt they must consider. A final income figure is calculated based on questions about individual income sources. The 1987-2003 surveys first asked respondents about the total income of all people living at the residence. Respondents were then asked to provide a detailed breakdown of each type of income for themselves and their spouses/partners. These questions provide researchers with a method of checking how close an individual's rough guess of income is to the more finely derived total.

Table MW1. Income Questions: 1967-2003

Question1 Survey Year
67 68 69 71 72 74 76 77 79, 81 82 84 86 87 89, 92 95-03
Wage & Salary *   * * * * * * * * * * * * *
Business Income *   * * * * * * * * * * * * *
Farm Income *   * * * * * * * * * * * * *
Interest, Dividends *   * * * * * * * * * * * * *
Rental Income *   * * * * * * * * * * * * *
Social Security *   * * * * * * * * * * * * *
Pension Income *   * * * * * * * * * * * * *
Unemployment Compensation *   * * * * * * * * * * * * *
Workers' Compensation *   * * *     *   *     * * *
Disability Income *   * * * * * * * * * * * * *
Welfare (AFDC) *   * * * * * * * * * * * * *
Food Stamps *   * * *   * * * * * * * * *
Alimony, Child Support *   * * * * * * * * * * * * *
Assistance from Relatives *   *         *   *   * * *  
Total Family Income   *   *         * * * * * * *
Ability to Get Along on Income                 * * * * *   * (03)
R and Husband/Partner Keep Joint or Separate Accounts                             *
 
1 All income categories are not asked as separate questions in all years; categories were most often combined in telephone surveys.

Respondents were periodically asked a full set of asset questions. Table MW2 depicts the questions pertaining to assets by survey year; note that mail and telephone surveys are omitted from the table because no asset questions were asked in those surveys. When respondents were asked the full selection of questions, they provided information on the value and mortgage of their home, cash assets, business and farm activity, vehicles, and other debts. In several years, respondents were also asked to rate their overall financial position as better than, worse than, or about the same as the previous year.

Respondents were asked a number of times (1967, 1969, 1971, 1972) about their ownership of specific types of physical assets (not included in Table MW2 due to space). Respondents stated in these years if they had purchased in the last year a new or used washing machine, dryer, stove, refrigerator, freezer, air conditioner, television, garbage disposal, stereo, or dishwasher, and if they had spent money on any major remodeling.

Table MW2. Asset Questions: 1967-2003

Question Survey Year
67 69 71 72 77 82, 87 89 92 95-03
Own Home/Apartment *   * * * * *   *
Market Value of Property *   * * * * *   *
Amount Owed on Property *   * * * * *   *
Have Estate/Trust             *   *
Amount Estate/Trust             *   *
Have Money Assets *   * * * * *   *
Amount of Money Assets *   * * * * *   *
Have Savings Bonds *   * * * * *   *
Amount of Savings Bonds *   * * * * *   *
Have Stocks/Bonds *   * * * * *   *
Value of Stocks/Bonds *   * * * * *   *
Have IRA/Keogh/401k/Life Insurance             *   *
Amount IRA/Keogh/401k/Life Insurance             *   *
People Owe You Money *       * * *   *
Amount Owed to You *       * * *   *
Own Farm/Business/Real Estate *   * * * * *   *
Market Value Farm/Business/Real Estate *   * * * * *   *
Amount Debts Farm/Business/Real Estate *   * * * * *   *
Own Vehicles *   * * * * *   *
Owe Any Money on Vehicles *   * * *   *   *
Amount Owe on Vehicles *   * * *   *   *
Market Value of Vehicles     * * *   *   *
Make/Model/Year of Vehicles *   *            
Owe Money to Creditors *   * * * * *   *
Amount Owed to Creditors *   * * * * *   *
Received Inheritance since DOLI             *   *
Received Life Insurance Settlement                 *
Better/Worse Financially   * * *       * *

Nonresponse

One major concern when asking individuals about their income and wealth is nonresponse bias. While it is outside the scope of this chapter to fully investigate nonresponse bias, this section briefly describes nonresponse in 1997 as an example of the issues raised. There are two primary types of questions on income and assets (or debts): general questions asking whether the respondent received income from a particular source or owned a particular asset, and specific questions asking about the amount of income or the value of the asset. Factors that are likely to contribute to nonresponse are suspicion, uncertainty, shared responsibility for family finances, and complex financial arrangements.

Table MW3 provides information on response rates to questions on income in the 1997 survey. Respondents who refuse to answer, who respond with "don't know," or who are valid or invalid skips are all counted as nonresponses. The cohort has high response rates on the receipt questions--generally around 95 percent. The percentages in the amount column are based only on individuals who reported receiving that type of income. These amount questions show much lower response rates. For example, the response rate for business and farm income drops by more than 19 percent.

Table MW3. Response Rates to Income Questions (Unweighted): 1997

Respondent's Income Receive Income from Source? Amount1
Wages/Salaries/Tips 95.8% 86.9%
Business/Farm 95.5 76.3
Unemployment Benefits 96.1 90.9
Social Security 95.8 89.5
Retirement Pension 95.5 --
Private Pension -- 88.5
Military Pension -- 77.8
Federal Gov. Pension -- 89.5
State/Local Pension -- 88.7
Union Pension -- 88.9
IRA/KEOGH -- 70.6
Other -- 81.4
 
Note: This table is calculated from R41534.00-R41538.00, R41540.00, R41544.00, R41546.00, and R41556.00-R41570.00.
1 Universe is restricted to individuals who receive income from the relevant source.

Table MW4 provides information on response rates to questions on wealth in the 1997 survey. The table again shows high response rates on the ownership questions, averaging around 95 percent. The amount column is based only on individuals who own a particular asset or have a particular debt. These amount questions have much lower response rates.

Table MW4. Response Rates to Questions on Wealth (Unweighted): 1997

Type of Wealth Ownership Amount1
Assets: Money Assets2 93.1% 67.6%
Securities2 92.6 50.5
Trusts 94.6 47.6
Primary Residence 96.6 85.2
Vehicles 95.9 75.5
Liabilities: Mortgage -- 92.7
Vehicle Debt 98.9 85.2
 
Note: This table is calculated from R41463.00-R41465.00, R41473.00- R41474.00, R41483.00-R41484.00, R41501.00-R41502.00, and R41528.00-R41531.00.
1 Universe is restricted to individuals who have the relevant asset or debt.
2 In addition, 26.3% of respondents answered the stepladder questions for money assets and 37.0% for securities.

Beginning in 1995, questions about some asset categories incorporated a "stepladder" to obtain some information from respondents who initially refused to answer or did not know the answer to an asset value question. For example, if a respondent refused to state or didn't know the value of her securities, she was then asked whether the value was over $15,000. If she answered affirmatively, she was asked whether the value was over $40,000. If the value of the securities was less than $15,000, she reported whether it was more than $5,000. This system was used to obtain some information about several asset categories; the ranges of the values are adjusted so that they are appropriate for each category. Users should consult the questionnaire or codebook if they are interested in determining the types of assets and ranges for which stepladders were used in 1995 and subsequent surveys.

Top Coding

To ensure respondent confidentiality, income variables exceeding particular limits are truncated each survey year so that values exceeding the upper limits are converted to a set maximum value. These upper limits vary by year, as do the set maximum values. From 1967 through 1972, upper limit dollar amounts were set to 999999. From 1974 to 1980, upper limit amounts were set to maximum values of 50000, and from 1981 to 1984 the set maximum value was 50001. Beginning in 1986, income amounts exceeding $100,000 were converted to a set maximum value of 100001. The top coding system changed in 1999; this is reflected in the codebook page for each variable.

From the cohort's inception, asset variables exceeding upper limits were truncated to 999999. Beginning in 1977, assets exceeding one million were converted to a set maximum value of 999997. Starting in 1992, the Census Bureau also topcoded selected asset items if it considered that release of the absolute value might aid in the identification of a respondent. This topcoding was conducted on a case-by-case basis with the mean of the top three values substituted for each respondent who reported such amounts.

Created Values and Summary Statistics

NLS staff created a small number of summary income and asset variables for this cohort. The standard variable, 'Total Family Income' or 'Total Net Income of Family,' was created only in years when personal interviews were conducted: 1967, 1969-72, 1977, 1982, and 1987-2003. This variable was created by adding up all of the individual's income categories. Should any of the categories be unavailable, the created variable for that year was labeled "not available." A small number of cases each year had negative income; these individuals had business expenses that are larger than their business and other income. The peak number of respondents with negative family income occurred in 1977, when nine individuals fell into this category.

Because 'Total Family Income' was only created for respondents for whom data were available for all income items, it includes a large number of missing values each year. To make it easier to use the available income information, beginning in 1992 survey staff created a second total income variable summing the reported income values regardless of whether all items were answered. This summary variable can be found by searching for "Summation" in the variable title.

The data set also includes a standard summary variable for wealth entitled 'Total Net Family Assets,' created in 1967, 1971, 1972, 1977, 1982, 1987, 1989, and 1995-2003. 'Total Net Family Assets' was created by adding up the individual's housing, savings, bond, IRA, insurance, and business assets and then subtracting mortgages, loans, and other debts; it excludes automobile wealth. Users are cautioned that a number of respondents have negative net family assets.

Related Variables: The 1989-2003 questionnaires include a large number of detailed questions about the respondent's and her spouse's pension and pension income. These surveys provide information on the income from specific types of pension income, instead of grouping all pension payments together as in earlier surveys. For further information on pensions, see the Pension Benefits & Pension Plans section of this guide. Income sources are also discussed in the Program Participation and Social Security & Disability sections.

Survey Instruments: Each year's questionnaire has a section on "Income" or "Assets & Income" where the variables described above are located.

User Notes

A number of respondents have husbands or children in the other NLS Original Cohorts. If the respondent is part of a multiple respondent household, researchers may be able to compare the respondent's income and asset information with that provided by other members of her family. (For more information on the possible linkages, users should refer to the Household Composition section of this guide.) Using the husband-wife pairs may provide a more complete picture of a respondent's available resources, while the mother-child pairs provide researchers with information on how income and assets are propagated across generations.