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Trends in men's earnings volatility: What does the Panel Study of Income Dynamics show?

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  • Shin, Donggyun
  • Solon, Gary

Abstract

Many recent studies have investigated trends in U.S. men's earnings volatility, but the studies based on the Panel Study of Income Dynamics appear to conflict with each other and with studies based on other data. We critique some of the existing methods of measuring earnings volatility, and we advocate for transparent methods that focus on simple measures of dispersion in year-to-year earnings changes. Applying such measures in the PSID, we find that, apart from the well-known counter-cyclicality of earnings volatility, men's earnings volatility increased during the 1970s, but did not show a clear trend afterwards until a new upward trend appeared after 1998.

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  • Shin, Donggyun & Solon, Gary, 2011. "Trends in men's earnings volatility: What does the Panel Study of Income Dynamics show?," Journal of Public Economics, Elsevier, vol. 95(7), pages 973-982.
    • Handle: RePEc:eee:pubeco:v:95:y:2011:i:7:p:973-982
    DOI: 10.1016/j.jpubeco.2011.02.007
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    More about this item

    Keywords

    Earnings volatility; Earnings dynamics; Economic risk;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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