Question

Have stock dividends become a more important source of income to U.S. households? Plot on a...

Have stock dividends become a more important source of income to U.S. households? Plot on a quarterly basis since 1959 the share of dividend income (FRED code: B703RC1Q027SBEA) in personal disposable income (FRED code: DSPI). Can you explain the 50-year trend? -Divide the first series by the second-

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Answer #1

The significance of stock dividend income has increased substantially for a family income. The trend shows that personal dividend income as a percentage of personal disposable income has improved from a mere 3.4% in 1959 to 72.4% in 2019.

The trend only got reversed substantially during the 2008 financial crash. The percentage of stock dividend income dropped to the 37.8% in Oct-2009 from highs of 70% in Oct-2007. Later, it got recovered to 72.2% in Oct-2012.

The chart showing the trend is attached.

500 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Jan-59 Feb-61 Mar-63 Apr-65 May-67 Jun 69 Jul-71 Aug-73 Sep 75 Oct-77 NOV

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