Research Report Validating Longitudinal Earnings in Dynamic Microsimulation Models: The Role of Outliers
Melissa M. Favreault, Owen Haaga
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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.
Research Areas Economic mobility and inequality Wealth and financial well-being Aging and retirement
Tags Social Security Economic well-being Pensions Wages and nonwage compensation Income and wealth distribution Retirement policy Wages and economic mobility
Policy Centers Income and Benefits Policy Center