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Abstract:
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I study the growth of the US family income, household net worth and family financial asset during 1989-2010 when the economy experienced the information technology advancement in the 1990s and a major recession after 2007. The secular trend was estimated by modeling the US social survey data using an age-period-cohort (APC) model to adjust for the age and birth cohort effects, and compared with that in Canada, where the recession was known to have minimal impact. Novel statistical methods are developed for fitting the APC models to the social survey data with unequal spans between the age and period and for testing significant difference between period effects. Our APC analysis reveals that 1) the median US family income increased significantly during the 1990s and a declined slightly after 2004, in contrast to sharp increasing in Canada; 2) the income age curves of the US and Canada coincided well though the Canadian economy is well-known to have a delay from the US and the two countries have different social welfare system that may potentially affect the age-curve; 3) the baby boomer generation earns the highest income, accumulates the most family net worth and financial asset.
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