Twenty Years of Rising Inequality in U.S. Lifetime Labour Income Values

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Twenty Years of Rising Inequality in U.S. Lifetime Labour Income Values

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AUDRA J. BOWLUS
JEAN-MARC ROBIN

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Abstract

In this paper we study the evolution of lifetime labour income inequality by constructing present value life cycle measures that incorporate both earnings and employment risk. We find that, even though lifetime income inequality is 40% less than earnings inequality, the total increase in lifetime income inequality over the past 20 years is the same as earnings inequality. While the total increase is the same, the pathways there differ with earnings inequality experiencing a steady increase and lifetime income inequality increasing in spurts particularly in the latter half of the 1990s. Finally, we find the changes in lifetime income inequality are primarily driven by changes in earnings mobility and changes in the earnings distribution itself, changes in employment risk and the composition of the sample, such as the shift toward attaining more education and the ageing population, do not play a large role. Copyright 2004 The Review of Economic Studies Ltd.

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Article provided by Blackwell Publishing in its journal The Review of Economic Studies.

Volume (Year): 71 (2004)
Issue (Month): (07)
Pages: 709-742
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Handle: RePEc:bla:restud:v:71:y:2004:i::p:709-742

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Paper
- Audra J, Bowlus ; Jean-Marc Robin, 2002. "Twenty Years of Rising Inequality in US Lifetime Labor Income Values," Working Papers 2002-58, Centre de Recherche en Economie et Statistique. [Downloadable!]

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Fabien Postel-Vinay & Hélène Turon, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," The Centre for Market and Public Organisation 05/121, Department of Economics, University of Bristol, UK. [Downloadable!]
Other versions:
- Helene Turon & Fabien Postel-Vinay, 2005. "The Public Pay Gap in Britain: Small Differences that (Don't?) Matter," 2005 Meeting Papers 92, Society for Economic Dynamics.
- Postel-Vinay, Fabien & Turon, Hélène, 2005. "The Public Pay Gap in Britain: Small Differences That (Don’t?) Matter," CEPR Discussion Papers 5296, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Fabien Postel-Vinay & Hélène Turon, 2005. "The public pay gap in Britain: Small differences that (don't?) matter," PSE Working Papers 2005-30, PSE (Ecole normale supérieure). [Downloadable!]
- Fabien Postel-Vinay & Hélène Turon, 2005. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," IZA Discussion Papers 1637, Institute for the Study of Labor (IZA). [Downloadable!]
- Fabien Postel-Vinay & Hélène Turon, 2007. "The Public Pay Gap in Britain: Small Differences That (Don't?) Matter," Economic Journal, Royal Economic Society, vol. 117(523), pages 1460-1503, October. [Downloadable!] (restricted)
Frijters, Paul & Lindeboom, Maarten & van den Berg, Gerard J., 2009. "Persistencies in the Labour Market," IZA Discussion Papers 4025, Institute for the Study of Labor (IZA). [Downloadable!]
Other versions:
- Paul Frijters & Maarten Lindeboom & Gerard van den Berg, 2000. "Persistencies in the labour market," Paul Frijters Discussion Papers 2000, School of Economics and Finance, Queensland University of Technology. [Downloadable!]
- Paul Frijters, 2000. "Persistencies in the Labor Market," Econometric Society World Congress 2000 Contributed Papers 1303, Econometric Society. [Downloadable!]
Gadi Barlevy & H.N. Nagaraja, 2006. "Identification of Search Models with Initial Condition Problems," NBER Working Papers 12166, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Gadi Barlevy & H. N. Nagaraja, 2006. "Identification of Search Models with Initial Condition Problems," 2006 Meeting Papers 4, Society for Economic Dynamics.
- Gadi Barlevy & H. N. Nagaraja, 2006. "Identification of Search Models with Initial Condition Problems," IZA Discussion Papers 2061, Institute for the Study of Labor (IZA). [Downloadable!]
- Gadi Barlevy & H. N. Nagaraja, 2006. "Identification of search models with initial condition problems," Working Paper Series WP-06-03, Federal Reserve Bank of Chicago. [Downloadable!]
Gadi Barlevy, 2003. "Estimating Models of On-the-Job Search Using Record Statistics," NBER Working Papers 10146, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Gadi Barlevy, 2004. "Estimating Models of On-the-Job Search Using Record Statistics," 2004 Meeting Papers 9, Society for Economic Dynamics. [Downloadable!]
- Gadi Barlevy, 2003. "Estimating models of on-the-job search using record statistics," Working Paper Series WP-03-18, Federal Reserve Bank of Chicago. [Downloadable!]
Dirk Krueger & Fabrizio Perri, 2005. "Does income inequality lead to consumption equality? evidence and theory," Staff Report 363, Federal Reserve Bank of Minneapolis. [Downloadable!]
Other versions:
- Dirk Kreuger & Fabrizio Perri, 2002. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory," Working Papers 02-15, New York University, Leonard N. Stern School of Business, Department of Economics. [Downloadable!]
- Dirk Krueger & Fabrizio Perri, 2005. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory," CFS Working Paper Series 2005/15, Center for Financial Studies. [Downloadable!]
- Dirk Krueger & Fabrizio Perri, 2002. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory," NBER Working Papers 9202, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
- Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory," Review of Economic Studies, Blackwell Publishing, vol. 73(1), pages 163-193, 01. [Downloadable!] (restricted)
Stéphane Bonhomme & Jean-Marc Robin, 2008. "Assessing the equalizing force of mobility using short panels: France 1990-2000," CeMMAP working papers CWP02/08, Centre for Microdata Methods and Practice, Institute for Fiscal Studies. [Downloadable!]
Other versions:
- STÉPHANE BONHOMME & JEAN-MARC ROBIN, 2009. "Assessing the Equalizing Force of Mobility Using Short Panels: France, 1990-2000," Review of Economic Studies, Blackwell Publishing, vol. 76(1), pages 63-92, 01. [Downloadable!] (restricted)
Heathcote, Jonathan & Storesletten, Kjetil & Violante, Giovanni L, 2004. "The Cross-Sectional Implications of Rising Wage Inequality in the United States," CEPR Discussion Papers 4296, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June. [Downloadable!]
Walentin, Karl, 2007. "Earnings Inequality and the Equity Premium," Working Paper Series 215, Sveriges Riksbank (Central Bank of Sweden). [Downloadable!]
Alexander Whalley, 2004. "Black-White Differences in the Insurance Value of Human Capital," Econometric Society 2004 North American Summer Meetings 575, Econometric Society. [Downloadable!]

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