Income Inequality
About
Ratio of household income at the 80th percentile to income at the 20th percentile. The 2024 Annual Data Release used data from 2018-2022 for this measure.
Income inequality in a society has a strong causal connection to health, independent of the income of individuals. Inequalities in a community can accentuate differences in social class and status and serve as a social stressor. Communities with greater income inequality can experience a loss of social connectedness, as well as decreases in trust, social support, and a sense of community for all residents. Income inequality within communities can have broad health impacts, including increased risk of mortality, poor health, and increased cardiovascular disease risks.1
Data and methods
Data Source
American Community Survey, 5-year estimates
The American Community Survey (ACS) is a nationwide survey designed to provide communities with a fresh look at how they are changing. It is a critical element in the Census Bureau's reengineered decennial census program. The ACS collects and produces population and housing information every year instead of every ten years, and publishes both one-year and five-year estimates. We use American Community Survey data for measures of social and economic factors.
Website to download data
For more detailed methodological information
Key Measure Methods
Income Inequality is a ratio
Income Inequality is the ratio of household income at the 80th percentile to that at the 20th percentile, i.e., when the incomes of all households in a county are listed from highest to lowest, the 80th percentile is the level of income at which only 20% of households have higher incomes, and the 20th percentile is the level of income at which only 20% of households have lower incomes. A higher inequality ratio indicates greater division between the top and bottom ends of the income spectrum.
Caution should be used when comparing these estimates across years
Caution should be used when comparing data across years as data come from overlapping 5-year spans. Additionally, margins of error for 5-year estimates containing data collected in 2020 increased compared to prior 5-year estimates. For more information about data comparability please visit Comparing 2022 American Community Survey Data.
Numerator
The numerator is the 80th percentile of median household income in a county. Income, defined as “total income,” is the sum of the amounts reported separately for wage or salary income; net self-employment income; interest, dividends, or net rental or royalty income or income from estates and trusts; Social Security or Railroad Retirement income; Supplemental Security Income (SSI); public assistance or welfare payments; retirement, survivor, or disability pensions; and all other income. Receipts from the following sources are not included as income: capital gains, money received from the sale of property (unless the recipient was engaged in the business of selling such property); the value of income “in kind” from food stamps, public housing subsidies, medical care, employer contributions for individuals, etc.; withdrawal of bank deposits; money borrowed; tax refunds; exchange of money between relatives living in the same household; gifts and lump-sum inheritances, insurance payments, and other types of lump-sum receipts.
Denominator
The denominator is the 20th percentile of median household income in a county.
Can This Measure Be Used to Track Progress
This measure is not appropriate for measuring progress.
Finding More Data
Disaggregation means breaking data down into smaller, meaningful subgroups. Disaggregated data are often broken down by characteristics of people or where they live. Disaggregated data can reveal inequalities that are otherwise hidden. These data can be disaggregated by:
- Subcounty Area
It is difficult to further stratify this measure.
References
1 Pickett KE, Wilkinson RG. Income inequality and health: A causal review. Social Science & Medicine. 2015;128:316-326.