The distribution of income in the United States continues to hold considerable congressional and public attention. Growing distance between earners at the top of the distribution and those in the middle and bottom of the distribution in recent decades has been a particular focus, as policymakers and analysts seek to understand the driving forces behind these distributional patterns and their broader implications for living standards and economic growth. In support of congressional consideration, this report describes recent and long-term income distribution trends; provides a summary of research on key factors that contribute to recent distributional patterns; and identifies potential linkages between inequality and economic growth. This section explores income distribution and income mobility trends using estimates from a variety of data sources. Census data are used to illustrate distributional trends for the overall population and within racial groups. Income data from the World Wealth and Income Database (WID)—a privately constructed series based on Internal Revenue Service (IRS) records—are used to explore income shares at the very top of the income distribution. Both data sources are used to quantify the relative impacts of the 2007-2009 Great Recession and its recovery across the U.S. income distribution overall and for certain income groups. Income inequality patterns in other high-income countries are examined using a database maintained by the Organization for Economic Cooperation and Development (OECD). This section closes with a discussion of income mobility patterns—that is, how individuals' placement in the income distribution changes over time—using Census Bureau analysis of survey data and estimates calculated from linked IRS tax records. Describing the income distribution is complicated on several levels. At its heart, this task requires meaningful choices about which data source(s) to use, which in turn affects how income is defined, the unit of analysis, and the extent to which analysis will characterize the full distribution. This report draws upon several sources, but primarily relies on official Census Bureau income statistics and WID income data. These sources vary along all dimensions just mentioned (i.e., income definition, unit of analysis, coverage of the full distribution); a summary description of these series is in the text box below. Likewise, there is not one consensus indicator that captures all aspects of the distribution. For example, comparing incomes at the top of the distribution to the bottom captures the overall span of the distribution, whereas top-to-middle (i.e., upper-tail inequality) or middle-to-bottom (i.e., lower-tail inequality) comparisons provide more information about the shape and pattern of change throughout the distribution. A single summary measure like the Gini coefficient can also be employed to examine changes over time, but sometimes at a loss of details on changes within a distribution. This report focuses on a small set of indicators, noting where other indicators tell a different story. Figure 1 illustrates the distribution of U.S. household income in 2015 by plotting income levels on the horizontal axis and the percentage of households on the vertical axis. Data are from the U.S. Census Bureau's statistics on households and measure "money income." Money income describes regular, pre-tax cash income from market and nonmarket sources, including government transfers, for all household members who are at least 15 years old. It excludes capital gains and in-kind forms of income (e.g., noncash government benefits, goods produced and consumed at home or farm, and employer contributions). The impact of excluding capital gains—which are significantly skewed across the income distribution —on measures of income inequality can be seen in a later section (" Trends at the Top of the Distribution ") that uses WID data. Figure 1 shows a right-skewed distribution—meaning that the bulk of households are found on the left hand side of the figure with a smaller share of households spread out to the right, with considerably more distance (in terms of income) between them. In 2015, median household income was $56,516 and mean (average) household income was $79,263. Although Figure 1 provides meaningful information about the shape and breadth of the income distribution at a point in time (i.e., for 2015), it does not indicate how the distribution of income has evolved over time. Figure 2 provides some insight to these changes by plotting mean quintile household income from 1967 to 2015 (earliest and latest year, respectively, that data are available). In particular, four main observations can be drawn from the figure: 1. Mean income increased for all groups. Mean household income increased in real terms (i.e., adjusted for inflation) for all quintiles over this time period. For example, mean income in the bottom 20% increased from $9,929 (in 2015 dollars) in 1967 to $12,457 in 2015. 2. Rising income i nequality was primarily driven by the relatively rapid growth of mean income in the top quintile. The rate of growth in mean income differs across quintiles, with the top quintile experiencing the highest rate of growth over the 1967-2015 period. Annualized growth rates over this period were 0.5% for the bottom quintile, 0.4% for the 2 nd quintile, 0.5% for the 3 rd quintile, 0.8% for the 4 th quintile, and 1.3% for the top quintile. Annualized mean income growth for the top 5% of households—a subgroup of the top income quintile——was 1.5%, suggesting that incomes at the very top of the distribution are driving growth patterns in the top quintile. 3. Inequality also grew among households in the lower 80% of the income distribution . In addition to growth in upper tail inequality (i.e., relatively rapid growth in mean income in the top quintile), the figure shows increasingly wider distribution of incomes among the lower 80% of households. In 1967, mean income in the 4 th quintile was 6.2 times as large as mean income in the bottom quintile; in 2015, it was 7.4 times as large. 4. Mean incomes respond to business cycles. Finally, mean income growth for all quintiles stalls or declines during periods of recession, and can take several years to bounce back after a recession. Across all quintiles, mean incomes fell by 1.7% (top quintile) to 4.2% (third quintile) between 2007 and 2009, and had not returned to 2007 levels (in real terms) by 2015 for the bottom three quintiles. Figure 2 illustrates three distinct distributional growth patterns, with the years 1975 and 2000 being apparent turning points: 1. Between 1967 and 1975 , inflation-adjusted average income grew for all five quintiles—except during recessions—with the bottom quintile experiencing relatively rapid growth at a 2% annualized rate. 2. Between 1975 and 2000 , inflation-adjusted average income continued to grow for all five quintiles—with brief interruptions during recessions—but in contrast to the 1967-1975 period, the mean income for the bottom quintile grew at the slowest rate (0.7% annualized growth over 1975-2000) and growth rates were progressively higher across the income distribution. As a result, overall income inequality increased markedly between 1975 and 2000, when compared with 1967 through 1975. 3. Between 200 0 and 201 5 — a period that contained two economic recessions, with the second being particularly deep—annualized real income growth was markedly lower for the top two income quintiles than it was for the 1975-2000 period, and incomes fell for the bottom three quintiles. Between 2000 and 2015, household incomes grew at average annualized rates of 0.1% and 0.2% for the fourth quintile and top quintile, respectively; while incomes fell at average annualized rates of 0.1%, 0.4%, and 0.8% for the third, second, and bottom quintiles. The net effect has been a slowdown in the rate of distributional expansion, as measured by the growing distance between mean incomes in the top and bottom quintiles. That is, the income distribution continued to widen over the 2000-2015 period, but at a slower rate than was observed for the 1975-2000 period. Figure 2 shows that the distribution of household income has become progressively less equal since 1967 when comparing top to bottom or top to middle, whereas it has been relatively stable when comparing middle to bottom. Although inequality has widened over the entire period for which Census data are available, the patterns of change (i.e., the reason why the distribution has become more unequal) that occurred before and after 2000 have been quite different. Concretely, income inequality increased between 1967 and 2000 because incomes grew faster for the top quintile—and, to a lesser extent, the fourth quintile—than the rest of the distribution. Inequality continued to grow, albeit at a slower rate of expansion, after 2000, because incomes grew modestly at the top while shrinking for the bottom three quintiles from 2000 to 2015. The trends in Figure 1 and Figure 2 describe distributional patterns for U.S. households in aggregate. This analysis is meaningful, but masks racial and ethnic dimensions of income inequality that have been the focus of some congressional interest. The Congressional Research Service (CRS) applies Census definitions in this section, which divide race into black, white, or Asian and ethnic origin into Hispanic or non-Hispanic. People of Hispanic origin may be of any race. Racial differences in the distribution of household income are illustrated in Figure 3 , which plots the income distributions of households categorized by the race—black, white, or Asian—of the "householder." In 2015, 45% of all households (i.e., regardless of race) had annual incomes under $50,000 whereas the share among households with a black householder was notably higher at 61%.