The B.E. Journal of Economic Analysis & Policy

Published by De Gruyter

Volume 12 Issue 2 - “Trends in Income Dynamics” edited by Gary Solon

June 2012

Issue of The B.E. Journal of Economic Analysis & Policy

Contents
Journal Overview

Advances Article

December 18, 2012

The Evolution of Household Income Volatility

Karen Dynan, Douglas Elmendorf, Daniel Sichel

Abstract

Using a representative longitudinal survey of U.S. households, we find that household income became noticeably more volatile between the early 1970s and the late 2000s despite the moderation seen in aggregate economic activity during this period. We estimate that the standard deviation of percent changes in household income rose about 30 percent between 1971 and 2008. This widening in the distribution of percent changes was concentrated in the tails. The share of households experiencing a 50 percent plunge in income over a two-year period climbed from about 7 percent in the early 1970s to more than 12 percent in the early 2000s before retreating to 10 percent in the run-up to the Great Recession. Households’ labor earnings and transfer payments have both become more volatile over time. As best we can tell, the rise in the volatility of men’s earnings appears to owe both to greater volatility in earnings per hour and in hours worked.

Contributions Article

June 12, 2012

Recent Trends in Earnings Volatility: Evidence from Survey and Administrative Data

Sule Celik, Chinhui Juhn, Kristin McCue, Jesse Thompson

Abstract

Recent papers find that earnings volatility is again on the rise (Dynan et al. 2008, and Shin and Solon 2011). Using household survey data—the matched Current Population Surveys and Survey of Income and Program Participation—and the newly available Longitudinal Employment and Household Dynamics administrative dataset, we find that earnings volatility was remarkably stable in the 1990s and through the mid 2000s. This evidence is in contrast to that from the Panel Study of Income Dynamics (PSID) which registers a sharp increase in the early 2000s. We investigate whether adjusting measures based on our sources to more closely match the characteristics of the PSID can reconcile this divergence in trends, but do not find a clear explanation for the divergence. We also find little evidence of a rise over this period in the components of volatility: volatility among job leavers, volatility among job stayers, and the fraction of workers who are job leavers.

Topics Article

October 26, 2012

Recent Trends in Men's Earnings Volatility: Evidence from the National Longitudinal Survey of Youth, 1985-2009

Donggyun Shin

Abstract

Evidence on recent trends in men’s earnings volatility from the Panel Study of Income Dynamics (PSID) has been found to be at odds with evidence from some other sources. This study adds evidence from the National Longitudinal Survey of Youth, which turns out to be more consistent with the PSID.

About this journal

Objective
The B.E. Journal of Economic Analysis & Policy (BEJEAP) welcomes submissions that employ microeconomics to analyze issues in organizational economics, consumer behavior, and public policy. Articles submitted to BEJEAP can come in two formats: research papers and letters. Authors should bring to their analysis whatever microeconomic theoretical, experimental or econometric tools are helpful. We publish both empirical work and applied theory (though not more abstract forms of applied theory), and our aim is to disseminate papers that have practical implications for public policy, organizational or individual decision making.

Topics

Design of organizations and institutions
Industrial organization
Health economics
Public finance
Labour Economics
Economics of education, family, development, law, or the environment
Effects of domestic and international policy

Article formats
Research Papers, Letters

> Information on submission process