Documentation and methodology
Underlying data are from the Current Population Survey Annual Social and Economic Supplement Historical Income Tables, Tables F-2, F-3, and F-5. Data are inflated to 2011 dollars using the CPI-U-RS. The projections are based on a regression analysis, based roughly on Katz and Krueger (1999), that uses the annual change in inflation-adjusted income of families in the middle fifth of the money income distribution as the dependent variable and the level of unemployment as the independent variable. The projections then use the regression parameters to forecast annual changes in middle-fifth family income based on unemployment forecasts through 2018 that are made by the Congressional Budget Office and Moody’s Economy.com, a division of Moody’s Analytics.