Validating Longitudinal Earnings in Dynamic Microsimulation Models: The Role of Outliers

Research Report

Validating Longitudinal Earnings in Dynamic Microsimulation Models: The Role of Outliers

November 15, 2013

Abstract

Rapid growth in the earnings of the highest earners over the past 25 years has contributed to strains on Social Securitys finances and made projecting lifetime earnings on a year-by-year basis-already a complicated technical problem-even more challenging. This project uses descriptive techniques and high-quality administrative data matched to household surveys to explore questions about the changing earnings distribution. We describe high earners' characteristics, both at a point in time and over longer periods (from 1983 through 2010). We then evaluate how well SSA's MINT7 model projects inequality in the earnings distribution and the long-term characteristics of earnings paths.

Cross-Center Initiative

Cross-Center Initiative: 
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