Racial Differences in Per Capita Income, 1960–76: The Importance of Household Size, Headship, and Labor Force Participation

Racial differences in average per capita income are decomposed, as are changes over time for both races. The 1960–76 decline in household size accounted for 13 percent of the per capita income inprovement of both races. Whereas real increases in earnings of husbands contributed most to improvements in well-being in husband-wife households, increases in income from sources other than earnings were most important to female headed households. During a period in which a growing proportion of both races resided in female headed households and racial differences in living arrangements widened, the per capita income of female headed households relative to husband-wife households declined.