The Distribution of Income among U.S. Self-Employed Farm Households: A Close Look Before and During COVID-19’s Recession

Abstract

This paper examines the distribution of ‘money’ income of self-employed farm households in the U.S. using multiple inequality measures and multi-year data from Current Population Survey. Special emphasis is given to 2016 and 2020, which portray total household income before and during the onset of the COVID-19’s recession. The two selected years, respectively, characterize low and high farm income years, with their likely divergent impact on the well-being of self-employed farm households. Using the Gini index measure of inequality, findings show that money income was just as unequally distributed in 2020, the year of the COVID-19’s recession, as in 2016. Adopted decomposition method of the Gini index showed income from off-farm wages and/or salaries, in comparison to the other components of total income, with the strongest equalizing marginal impact on the overall distribution of money income in 2016 and with a much lesser impact in 2020. Considering that off-farm income from wages and/or salaries is the dominant income source of self-employed farm households, macroeconomic factors are likely to continue to influence the distribution of income among self-employed farm households.