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United States Earnings Dynamics: Inequality, Mobility, and Volatility

In: Measuring Distribution and Mobility of Income and Wealth

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  • Kevin L. McKinney
  • John M. Abowd
  • John Sabelhaus

Abstract

Using data from the Census Bureau�s Longitudinal Employer-Household Dynamics (LEHD) infrastructure files, we study changes over time and across sub-national populations in the distribution of real labor earnings. We consider four large MSAs (Detroit, Los Angeles, New York, and San Francisco) for the period 1998 to 2017, with particular attention paid to the subperiods before, during, and after the Great Recession. For the four large MSAs we analyze, there are clear national trends represented in each of the local areas, the most prominent of which is the increase in the share of earnings accruing to workers at the top of the earnings distribution in 2017 compared with 1998. However, the magnitude of these trends varies across MSAs, with New York and San Francisco showing relatively large increases and Los Angeles somewhere in the middle relative to Detroit whose total real earnings distribution is relatively stable over the period. Our results contribute to the emerging literature on differences between national and regional economic outcomes, exemplifying what will be possible with a new data exploration tool�the Earnings and Mobility Statistics (EAMS) web application�currently under development at the U.S. Census Bureau.
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Suggested Citation

  • Kevin L. McKinney & John M. Abowd & John Sabelhaus, 2021. "United States Earnings Dynamics: Inequality, Mobility, and Volatility," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 69-104, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberch:14448
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    References listed on IDEAS

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    1. Melissa Bjelland & Bruce Fallick & John Haltiwanger & Erika McEntarfer, 2011. "Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 29(4), pages 493-505, October.
    2. John C. Haltiwanger & Henry R. Hyatt & Lisa B. Kahn & Erika McEntarfer, 2018. "Cyclical Job Ladders by Firm Size and Firm Wage," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(2), pages 52-85, April.
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    5. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2018. "Distributional National Accounts: Methods and Estimates for the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 553-609.
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    7. Andrew Foote & Ashwin Machanavajjhala & Kevin McKinney, 2019. "Releasing Earnings Distributions using Differential Privacy: Disclosure Avoidance System For Post Secondary Employment Outcomes (PSEO)," Working Papers 19-13, Center for Economic Studies, U.S. Census Bureau.
    8. Jaison R. Abel & Richard Deitz, 2019. "Why Are Some Places So Much More Unequal Than Others?," Economic Policy Review, Federal Reserve Bank of New York, vol. 25(Dec).
    9. Congressional Budget Office, 2019. "The Distribution of Household Income, 2016," Reports 55413, Congressional Budget Office.
    10. Henry Hyatt & Erika McEntarfer & Kevin McKinney & Stephen Tibbets & Doug Walton, 2014. "JOB-TO-JOB (J2J) Flows: New Labor Market Statistics From Linked Employer-Employee Data," Working Papers 14-34, Center for Economic Studies, U.S. Census Bureau.
    11. John M. Abowd & Bryce E. Stephens & Lars Vilhuber & Fredrik Andersson & Kevin L. McKinney & Marc Roemer & Simon Woodcock, 2009. "The LEHD Infrastructure Files and the Creation of the Quarterly Workforce Indicators," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 149-230, National Bureau of Economic Research, Inc.
    12. John M. Abowd & Kevin L. McKinney & Ian M. Schmutte, 2019. "Modeling Endogenous Mobility in Earnings Determination," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(3), pages 405-418, July.
    13. Martin Beraja & Andreas Fuster & Erik Hurst & Joseph Vavra, 2019. "Regional Heterogeneity and the Refinancing Channel of Monetary Policy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 109-183.
    14. Sabelhaus, John & Song, Jae, 2010. "The great moderation in micro labor earnings," Journal of Monetary Economics, Elsevier, vol. 57(4), pages 391-403, May.
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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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