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Government transfers to households: From 1947 to 1966 to now


One thing governments do is redistribute wealth from some citizens to others. Some of these transfers are explicitly captured in the system of national accounts, and the graph includes the five largest categories. It’s striking how the composition of these transfers has changed. The data start in 1947, so it’s no surprise the support of WWII veterans took the lion’s share for the first years. The number of veterans eligible for benefits declined as social security progressively expanded. In 1966, Medicaid and Medicare were introduced, and we see their shares slowly increasing. Today, social security benefits claim the largest share of government transfers: 40%. Medicare claims 29%,  Medicaid claims 25%, unemployment insurance benefits claim 1%, and veterans’ benefits claim 4%.

How this graph was created: These national accounts data can be found in the personal income release table. Check these five series and click on “Add to Graph.” From the “Edit Graph” panel, go to the “Format” tab to choose “Area” as the type of graph and “Percent” as the type of stacking for the graph. [NOTE: This stacked area graph displays each of the series as a percent of the total of all five series shown here. As the y-axis label indicates, the original units of the series are billions of dollars.]

Suggested by Christian Zimmermann.

View on FRED, series used in this post: W729RC1Q027SBEA, W823RC1Q027SBEA, W824RC1Q027SBEA, W825RC1Q027SBEA, W826RC1Q027SBEA


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