Giving Compass' Take:
- Frequen disaggregated data collection can help drive accouracy and transparency when in economic research and help better from policy.
- What can donors do to enocurage disaggragted data for improved policymaking?
- Read why U.S. data should be disaggregated by race and ethnicity.
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Once a year, since March 2020, the U.S. Department of Commerce’s Bureau of Economic Analysis releases its data series on the distribution of growth in personal income with updated annual data from 2 years prior, providing valuable intelligence on who is benefiting from economic growth in the United States. In December 2021, the bureau released the disaggregated data on economic growth for 2019 and extended these data back to 2000.
The data are full of insights into the past 20 years of economic growth. They show, for example, that the economic policy response to the Great Recession of 2007–2009 was insufficient and left a huge number of Americans behind, and that inequality has continued to increase over the past two decades. Yet until the introduction of this new data series almost 2 years ago, federal statistical agencies essentially did not produce any comprehensive income inequality data, even though rising inequality has been a defining feature of the U.S. economy for the past 40 years.
The U.S. Census Bureau does provide data on money income, and some other releases, such as the tables released alongside the Consumer Expenditure Survey, have some distributional data, but neither provides a comprehensive look at income. Research shows that the release of economic growth statistics powerfully shapes the U.S. economic narrative. But economic growth is not a neutral concept. Devoting considerable resources to the production of national growth statistics while ignoring how that growth is distributed reflects an implicit belief that the division of growth is not particularly important.
While this may have been a defensible position in the 1950s and 1960s, when growth was broad based and most households saw increases in income that were commensurate with Gross Domestic Product growth, over the past four decades, growth has increasingly skewed toward the rich. That means that when headline growth is, say, 3 percent, it is actually usually much higher for those in the top 10 percent of households by income and lower for everyone else. This misleads U.S. households about the state of the economy, tilts economic narratives in favor of high-income households, and makes it impossible for policymakers to mount a policy response to rising inequality.
The Bureau of Economic Analysis’ distributional income data series represents a critical step in modernizing federal data for the 21st century economy, but it needs considerable development before it can be a true corrective to headline growth. A critical component is missing: speed.
Currently, the data on inequality in growth is released just once annually and on a 2-year lag. Yet for this data series to have a real impact on the economic debate, and to provide actionable intelligence for analysts and policymakers, it must come out quarterly, and it must come out on a short lag—preferably with the same latency as GDP growth, which is released on a one-month lag.
Read the full article about disaggregated data by Austin Clemens at the Center for Equitable Growth.