Can we know how good future economic growth can be if we do not know how good it has been? Apparent changes in the structure of the economy, notably, the rise of information technology, skill-extensive technical change, and a potential reversion to nonmarket production, will serve to increase the effort needed to maintain our already tenuous grasp on measuring income, wages, and well-being. Piecing together available measures, the United States appears to have been experiencing substantial economic growth as measured by both per-family income and wealth. The well-known dispersion of income by education is evident, with earnings of those with less than high-school education on the decline, but rising for those with college education or more. For families in the Panel Study of Income Dynamics (PSID) headed by a male aged 25–64, mean family income rose by 11.5 percent, from $58,585 (1997 CPI-U dollars) for 1983 to $65,292 for 1993. If one factors in a 1-percent per annum correction factor to the CPI (Matthew D. Shapiro and David W. Wilcox, 1997; Michael J. Boskin et al., 1998), average real family income grew on the order of 22 percent in 10 years. Rising family income is not explained simply by more workers per family, since the civilian labor-force participation rate rose only 1.5 percentage points, from 65.3 percent in 1986 to 66.8 percent in 1996. Nor does the rise in income appear to be the result of more market hours per week. If anything, hours per worker may have declined, overall. Average weekly hours in the private sector are reported to have changed only trivially, declining from

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Portfolio Choices of Parents and Their Children as Young Adults: Asset Accumulation by African-American Families by Ngina S. Chiteji and Frank P. Stafford. Published in volume 89, issue 2, pages 377-380 of American Economic Review, May 1999

Myriad politicians express concern over increased competition from abroad, but among economists the home economy is widely believed to benefit from improvement in foreign economies (Jeffrey Williamson, 1991). Work by a few economists (John R. Hicks, 1953; Ronald Jones, 1979; Paul Krugman, 1979) suggests that there is some truth to popular concerns over competitiveness. The effect of foreign competition in reducing the relative price of the goods that the United States formerly exported can lower aggregate real income in the United States even as world income rises. Accordingly, the success of Japan, Western Europe, and more recently many other nations in producing goods that were, as of the end of World War II, virtual monopolies of the United States is another potential candidate for explaining the fall (relative to trend) of the average living standard or real wage in the United States.