Exploring Society By The Numbers

Income Differences

Tony Catanese, DePauw College


Income differences can be measured narrowly or broadly. A narrow definition might include only work for which pay is received, what economists call earnings, which can range from an hour to a year to a lifetime. A less narrow definition of income could add to earnings "unearned" income, which includes sources such as transfer payments, interest and dividends, or capital gains. An even broader definition of income would include wealth, which uses assets and liabilities. Regardless of how one measures income and their differences, the fundamental issues are the same: Why are there income differences within and among countries and what are their patterns? For example, there is a raging public debate about the growing income inequality and decline of the middle class in the United States?

Learning Goals

  • Learning about survey methodology and sampling methods
  • Using software to access and analyze census data
  • Identifying independent and dependent variables
  • Learning how to construct, read, and interpret bivariate tables displaying frequencies and percentages
  • Creating visual tools representing quantitative data in the form of charts or graphs
  • Identifying population trends over time
  • To discuss the topic of occupational structure using census data

Context for Use

This activity is used in An Economics of Income Differences class for undergraduate students. This activity explores topics of income/poverty, occupation and race/gender to look the relationship between education and earnings over time in the United States.

Description and Teaching Materials

Exercises: PDF (Acrobat (PDF) 73kB Mar24 09)
Exercises: DOC (Microsoft Word 41kB Mar24 09)
Teaching Notes: PDF (Acrobat (PDF) 62kB Mar24 09)
Teaching Notes: DOC (Microsoft Word 32kB Mar24 09)

Teaching Notes and Tips

This activity uses two customized data sets; one made from the 2000 census and another made from census trend data combining census information from 1950-1990. It guides students through data manipulation using WebCHIP software found at DataCounts!. To open WebCHIP with the dataset for the activity, please see instructions and links in the exercise documents under teaching materials. For more information on how to use WebCHIP, see the How To section on DataCounts!


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References and Resources

Chapter 1 (Frank Levy, "Incomes and Income Inequality," pp. 1-57) of Reynolds Farley (Ed.) book (State of the Union: America in the 1990s, Volume 1: Economic Trends. New York: Russell Sage Foundation, 1995)

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