Income inequality: a sharp fall for the youngest age group

The Census Bureau reported an overall increase in personal income inequality as expressed by Gini ratio jump from 0.503 to 0.510. This is a significant change considering the uncertainty of ~0.002 as reported by the Bureau. It is interesting to know how this rise is distributed over age pyramid. Figure 1 displays the change in Gini from 2010 to 2011 in various age groups from 15 to 75 years. The overall increase of 0.007 is unevenly distributed over the pyramid. The youngest age group between 15 and 24 years, is the gainer  - the Gini has dropped by 0.015. This is a significant drop since the uncertainty of the measurement is 0.006. Another age group characterized by a fall in income inequality is between 65 and 69 years of age. The Gini has dropped by 0.012 (±0.006). 


An intriguing observation is the difference in the change in Gini ratio between adjacent age groups 60-64 and 65-69. The difference has changes by 0.032 – a huge amount which needs special explanation from the Census Bureau. This difference looks spurious but it is likely responsible for the overall rise.



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