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Trends in the Transitory Variance of Male Earnings in the U.S., 1991-2003: Preliminary Evidence from LEHD data

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  • Peter Gottschalk

    () (Boston College)

  • Erika McEntarfer

    (U.S. Department of the Treasury)

  • Robert Moffitt

    (Johns Hopkins University)

Abstract

We estimate the trend in the transitory variance of male earnings in the U.S. from 1991 to 2005 using an administrative data set of Unemployment Insurance wage reports, the Longitudinal Employer-Employer Dynamics data set (LEHD), and compare the findings to those of Moffitt and Gottschalk (2008) obtained from the Michigan Panel Study of Income Dynamics (PSID). Despite substantial differences between the LEHD and the PSID in the levels of cross- sectional variances of male earnings, the changes over time in transitory variances obtained from estimating two of the models in Moffitt and Gottschalk are quite similar in the two data sets. Specifically, over the 1991-2003 period, transitory variances fell slightly, and then rose slightly, returning in 2003 to the same approximate level they had obtained in 1991. Overall, the analysis of the LEHD data confirms the findings based on the PSID that the transitory variance did not show a trend net of cycle over this period.

Suggested Citation

  • Peter Gottschalk & Erika McEntarfer & Robert Moffitt, 2008. "Trends in the Transitory Variance of Male Earnings in the U.S., 1991-2003: Preliminary Evidence from LEHD data," Boston College Working Papers in Economics 696, Boston College Department of Economics.
  • Handle: RePEc:boc:bocoec:696
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    Cited by:

    1. Joseph G. Altonji & Anthony A. Smith Jr. & Ivan Vidangos, 2013. "Modeling Earnings Dynamics," Econometrica, Econometric Society, vol. 81(4), pages 1395-1454, July.
    2. Cappellari, Lorenzo & Jenkins, Stephen P., 2013. "Earnings and Labour Market Volatility in Britain," IZA Discussion Papers 7491, Institute for the Study of Labor (IZA).
    3. Lorenzo Cappellari, 2011. "Flexicurity, wage dynamics and inequality over the life-cycle," DISCE - Quaderni dell'Istituto di Economia dell'Impresa e del Lavoro ieil0064, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    4. Heshmati, Almas & Kim, Jungsuk, 2014. "A Survey of the Role of Fiscal Policy in Addressing Income Inequality, Poverty Reduction and Inclusive Growth," IZA Discussion Papers 8119, Institute for the Study of Labor (IZA).
    5. repec:taf:applec:v:49:y:2017:i:43:p:4299-4309 is not listed on IDEAS
    6. Hospido, Laura & Moral-Benito, Enrique, 2016. "The public sector wage premium in Spain: Evidence from longitudinal administrative data," Labour Economics, Elsevier, vol. 42(C), pages 101-122.

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