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Monthly household income volatility in the U.S., 1991/92 vs. 2002/03

  • Neil Bania

    ()

    (University of Oregon)

  • Laura Leete

    ()

    (University of Oregon)

We investigate changes in monthly income volatility in non-elderly households in the U.S. since the early 1990s. Using the Survey of Income and Program Participation (SIPP), we find that monthly income volatility is highest for lower income households, and that it increased substantially for these households between 1992 and 2003. The increase appears to have its roots in the shift of household income away from relatively stable public assistance (AFDC/TANF) benefits and towards earnings. We subject these findings to sensitivity analyses and find similar results. We also find increases in volatility among households with incomes above the poverty line, but these findings are less robust in the face of some sensitivity analyses.

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File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P59.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 3 ()
Pages: 2100-2112

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Handle: RePEc:ebl:ecbull:eb-08i30028
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  1. V. Joseph Hotz, 2003. "The Earned Income Tax Credit," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 141-198 National Bureau of Economic Research, Inc.
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  6. Newman, Constance, 2006. "The Income Volatility See-Saw: Implications for School Lunch," Economic Research Report 7237, United States Department of Agriculture, Economic Research Service.
  7. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
  8. Peter Gottschalk & Robert Moffitt, 1994. "The Growth of Earnings Instability in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 217-272.
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