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Q:  

I am using microdata from the 2000 Census of Population and Housing. I have found some families with a code of "0" on family income. Is this an error on the part of the Census Bureau? If not, what is the explanation?

A:  

This is not an error. There are several things going on:

The "no income" family population is small---32,937 out of 3.662,100 families. The universe is defined as hht ge 1 and hht le 3.

This finc=0 population can be divided into 3 types:

Type 1 - The family has no income, but the household income is positive because a non-relative living in the household has income. This accounts for 4,224 of the cases.

Type 2 - This is a very small population, N=97, is where the family members have a mix of positive and negative incomes, which sum to 0.

Type 3 - This is the most common type, N=28,619, defined as hinc=0 and finc=0. All sources of income for persons >14 have values of "0." The Census Bureau explained this by saying that it is possible for a family or household to report zero income with each individual in the family/household reporting zero amounts in every income field. These people could be living on income in-kind or money from other sources of non-regular or lump sum payments.

Text from the Census Bureau definition of income says that receipts from the following sources are not included as income: capital gains, money received from the sale of property (unless the recipient was engaged in the business of selling such property); the value of income ‘‘in kind’’ from food stamps, public housing subsidies, medical care, employer contributions for individuals, etc.; withdrawal of bank deposits; money borrowed; tax refunds; exchange of money between relatives living in the same household; and gifts and lump-sum inheritances, insurance payments, and other types of lump-sum receipts.

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