Recent Trends in the Variability of Individual Earnings and Household Income (PDF; 3.5 MB)
Source: Congressional Budget Office
From CBO Director’s Blog:

The variability of individual earnings and household income (that is, how much a worker’s earnings or a household’s income bounces around from year to year) has become a topic of much interest to analysts and the policy community. Today, CBO issued a comprehensive paper on the topic. The study follows up on our earlier work on earnings and income variability — see here.

The paper issued today examines variation over the past two decades, both for individuals and for households, using data from the Social Security Administration (SSA) and the Census Bureau. The bottom line from the analysis is that a substantial fraction of workers experience large changes in their earnings from one year to the next, though the trend in earnings variability has been roughly flat since the mid-1980s. A somewhat smaller percentage of households see large changes in their income; that trend has also been roughly flat over the same period. (Some other recent studies relying on other data sources have suggested increases in household and family income volatility, but various problems in the surveys used in those studies may be contaminating those results. The administrative data upon which CBO relies tends to be more consistent over time and more accurate in general than many survey results.)

This entry was posted on Monday, June 30th, 2008 at 6:34 pm and is filed under Business and economics. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.