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Monthly Earnings Volatility and Household Pooling

Author

Listed:
  • Martin Eckhoff Andresen
  • Andreas Kostøl
  • Ross Milton
  • Corina Mommaerts
  • Luisa Wallossek

Abstract

This paper examines monthly earnings volatility and its transmission to household earnings volatility using Norwegian data on the universe of monthly pay histories. We document substantial month-to-month earnings changes: within a job, while over one-quarter of months have no earnings changes, another quarter have at least a 23% change. Accounting for multiple jobs and non-employment increases volatility, while aggregating to households reduces volatility by 12-35%. Event studies around job loss and couple formation, along with decomposition and bounding exercises, show that most of this decline reflects pooling effects rather than sorting or responses to shocks.

Suggested Citation

  • Martin Eckhoff Andresen & Andreas Kostøl & Ross Milton & Corina Mommaerts & Luisa Wallossek, 2025. "Monthly Earnings Volatility and Household Pooling," CESifo Working Paper Series 12323, CESifo.
    • Handle: RePEc:ces:ceswps:_12323
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    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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