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Do Workers with Low Lifetime Earnings Really Have Low-Earnings Every Year? Implications for Social Security Reform


  • Thomas L. Hungerford

    (The Levy Economics Institute)


When it comes to retirement income policy, there is a general perception that workers have full 40-year working careers before retiring. Further, it is generally assumed that workers with low lifetime earnings have low earnings in each year during a normal working career. The basic research question is why do some workers have low lifetime earnings? Is it due to low earnings in every year, or is it due to some years of no earnings combined with years of relatively modest earnings? The key findings from this paper are: (1) most individuals with minimum (and subminimum) wage lifetime average earnings are women, and (2) most of these women have low lifetime average earnings because of fewer years with earnings, rather than low earnings in each year of a 40-year working career.

Suggested Citation

  • Thomas L. Hungerford, 2003. "Do Workers with Low Lifetime Earnings Really Have Low-Earnings Every Year? Implications for Social Security Reform," Labor and Demography 0309007, EconWPA.
  • Handle: RePEc:wpa:wuwpla:0309007
    Note: Type of Document - word; prepared on PC; to print on PostScript; pages: 21; figures: included

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    References listed on IDEAS

    1. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-229, April.
    2. Dimitri B. Papadimitriou & L. Randall Wray, "undated". "Does Social Security Need Saving? Providing for Retirees throughout the Twenty-first Century," Economics Public Policy Brief Archive ppb_55, Levy Economics Institute.
    3. L. Randall Wray, "undated". "Killing Social Security Softly with faux Kindness," Economics Policy Note Archive 01-6, Levy Economics Institute.
    4. Ralph E. Smith & Bruce Vavrichek, 1992. "The Wage Mobility of Minimum Wage Workers," ILR Review, Cornell University, ILR School, vol. 46(1), pages 82-88, October.
    5. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
    6. Quinn, Joseph F, 1987. "The Economic Status of the Elderly: Beware of the Mean," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 33(1), pages 63-82, March.
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    More about this item


    Earning Patterns; Social Security; Low-wage Workers;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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