Indicator 3: Household Income
How Does Massachusetts Perform?
Massachusetts had a higher median household income than both the average LTS and the U.S. as a whole in 2016. After experiencing a sharp decline in 2011, Massachusetts has seen a faster recovery in household income than the LTS or U.S. Massachusetts recorded 12% median household income growth since 2011, while the LTS grew by only 6%, and the U.S. by 6.9%. Median household income growth in Massachusetts surged 5.3% from 2015 to 2016. The difference between the median household income in Massachusetts and that of the LTS and the U.S. is increasing as Massachusetts’ median income is rising faster than the LTS or the U.S.
Massachusetts has proportionally many more households with incomes above $100,000 than both the LTS and U.S. This could partly explain why incomes have recovered at a faster rate in Massachusetts than elsewhere, since over the last several decades higher income households have seen larger gains in household income than the population as a whole. This is largely due to increasing returns on college education, and Massachusetts, having a high relative proportion of degree holders. As such, the state should see larger income gains than would be experienced elsewhere. New Jersey, another highly educated state, is the only state among the LTS to have a higher median household income than Massachusetts.