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Trends in men's earnings volatility: What does the Panel Study of Income Dynamics show?

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  • Shin, Donggyun
  • Solon, Gary

Abstract

Many recent studies have investigated trends in U.S. men's earnings volatility, but the studies based on the Panel Study of Income Dynamics appear to conflict with each other and with studies based on other data. We critique some of the existing methods of measuring earnings volatility, and we advocate for transparent methods that focus on simple measures of dispersion in year-to-year earnings changes. Applying such measures in the PSID, we find that, apart from the well-known counter-cyclicality of earnings volatility, men's earnings volatility increased during the 1970s, but did not show a clear trend afterwards until a new upward trend appeared after 1998.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 95 (2011)
Issue (Month): 7-8 (August)
Pages: 973-982

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Handle: RePEc:eee:pubeco:v:95:y:2011:i:7-8:p:973-982

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Web page: http://www.elsevier.com/locate/inca/505578

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Keywords: Earnings volatility Earnings dynamics Economic risk;

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References

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Citations

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Cited by:
  1. Cappellari, Lorenzo & Leonardi, Marco, 2006. "Earnings Instability and Tenure," IZA Discussion Papers 2527, Institute for the Study of Labor (IZA).
  2. Markus Jantti & Stephen P. Jenkins, 2014. "Income Mobility," Working Papers 319, ECINEQ, Society for the Study of Economic Inequality.
  3. Bingley, Paul & Cappellari, Lorenzo & Westergård-Nielsen, Niels C., 2013. "Unemployment Insurance, Wage Dynamics and Inequality over the Life Cycle," IZA Discussion Papers 7128, Institute for the Study of Labor (IZA).
  4. Wojciech Kopczuk & Emmanuel Saez & Jae Song, 2007. "Uncovering the American Dream: Inequality and Mobility in Social Security Earnings Data since 1937," NBER Working Papers 13345, National Bureau of Economic Research, Inc.
  5. Claudia M. Buch, 2008. "The Great Risk Shift? Income Volatility in an International Perspective," CESifo Working Paper Series 2465, CESifo Group Munich.
  6. Shaffer , Sherrill & Hasan , Iftekhar & Zhou, Mingming, 2009. "New small firms and dimensions of economic performance," Research Discussion Papers 4/2009, Bank of Finland.
  7. repec:ese:iserwp:2009-18 is not listed on IDEAS
  8. Kim, Seewon, 2013. "Prudent consumers: New evidence from the Consumer Expenditure Survey," Economic Modelling, Elsevier, vol. 33(C), pages 77-85.
  9. Shane T. Jensen & Stephen H. Shore, 2008. "Changes in the Distribution of Income Volatility," Papers 0808.1090, arXiv.org.
  10. Cappellari, Lorenzo & Jenkins, Stephen P., 2013. "Earnings and Labour Market Volatility in Britain," IZA Discussion Papers 7491, Institute for the Study of Labor (IZA).
  11. Baicker, Katherine & Clemens, Jeffrey & Singhal, Monica, 2012. "The rise of the states: U.S. fiscal decentralization in the postwar period," Journal of Public Economics, Elsevier, vol. 96(11), pages 1079-1091.
  12. Matthew Rutledge, 2011. "Long-Run Earnings Volatility and Health Insurance Coverage: Evidence from the SIPP Gold Standard File," Working Papers 11-35, Center for Economic Studies, U.S. Census Bureau.
  13. Yi Wen, 2011. "Making sense of China’s astronomical foreign reserves," Working Papers 2011-018, Federal Reserve Bank of St. Louis.
  14. Ranchhod, Vimal, 2013. "Earnings volatility in South Africa," SALDRU Working Papers 121, Southern Africa Labour and Development Research Unit, University of Cape Town.
  15. Ostrovsky, Yuri, 2012. "The correlation of spouses' permanent and transitory earnings and family earnings inequality in Canada," Labour Economics, Elsevier, vol. 19(5), pages 756-768.
  16. Sherrill Shaffer & Robert N. Collender, 2008. "Rural Economic Performance And Federal Credit Programs," CAMA Working Papers 2008-26, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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