Research Report Measuring Trends in Income Variability
Austin Nichols, Seth Zimmerman
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Using PSID data from 1968 to 2005, we find that the volatility of family income has increased over time (a trend that is robust to a large variety of modeling choices) but the trend in individual income volatility is less clear. Measurement error cannot fully account for these facts, but the increasing covariance of individual incomes within the family (driven by increases in the correlation of head and spouse earnings, due largely to the increased proportion of families with two earners) can.
Research Areas Economic mobility and inequality Wealth and financial well-being Families Social safety net
Tags Low-Income Home Energy Assistance Program (LIHEAP) Economic well-being Employment and income data Wages and nonwage compensation Income and wealth distribution Wages and economic mobility
Policy Centers Income and Benefits Policy Center