Non-Labor Income: Large and Growing in Importance Across the West

Non-labor income is one of the largest and fastest growing sources of income in the West; constituting 34 percent of total personal income in 2011 and 60 percent of net growth in real personal income during the last decade.

  • Rural counties generally have higher shares of non-labor income, but the amount and type of non-labor income varies greatly by county across the West.
  • Non-labor income payments can be grouped into three categories: income from investments, payments associated with aging, and payments associated with economic hardship.
  • Future non-labor income levels will depend on investment performance, demographic trends, and public policy.

Non-labor income (NLI) is one of the largest and fastest growing sources of income in the West, constituting 34 percent of total personal income in 2011; and 60 percent of net growth in real personal income during the last decade. In many counties non-labor income is the single largest contributor to income, particularly in rural areas.

Non-Labor Income as Share of Total Personal Income, 2011

Non-Labor Income as Share of Total Personal Income, 2011

Comprised of three main types—investments, age related payments, and hardship payments—non-labor income is affected by the stock market, retiring Baby Boomers, and changes to Medicare, Medicaid, and Social Security.

Non-labor income is important for all western counties. To understand how NLI can affect local economies, it is important to understand both the makeup of non-labor income and how it is distributed. This post includes a manuscript (PDF) and white paper (PDF) that describe our non-labor income research, a county level sortable data table, and an interactive showing individual counties.

We also produced a short column on non-labor and its important role in the West’s economy.