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Recent Trends in Household Income Dynamics for the United States, Germany and Great Britain

  • Sisi Zhang

    ()

    (The Urban Institute)

This paper examines the recent trends in household income volatility in the United States, Germany and Great Britain, and compares household income volatility with individual income volatility. I estimate a formal error components model using the Cross-national Equivalence File from 1979 to 2004. I find that household income volatility, measured by the transitory variance of household income, accounts for more than half of the total income variance for all three countries. Despite the differences in the total household income variances among the three countries, the permanent variances converges since the late 1990s.

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File URL: http://www.accessecon.com/Pubs/EB/2010/Volume30/EB-10-V30-I2-P109.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 30 (2010)
Issue (Month): 2 ()
Pages: 1154-1172

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Handle: RePEc:ebl:ecbull:eb-10-00140
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  8. Gray, David & Finnie, Ross & Beach, Charles M., 2008. "Long-run Inequality and Annual Instability of Men's and Women's Earnings in Canada," Analytical Studies Branch Research Paper Series 2008311e, Statistics Canada, Analytical Studies Branch.
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  11. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  12. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
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  15. MaCurdy, Thomas E., 1982. "The use of time series processes to model the error structure of earnings in a longitudinal data analysis," Journal of Econometrics, Elsevier, vol. 18(1), pages 83-114, January.
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