Subjective Earnings Risk

Andrew Caplin, Victoria Gregory, Eungik Lee, Søren Leth-Petersen and Johan Sæverud ()
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Johan Sæverud: https://www.economics.ku.dk/staff/phd_kopi/?pure=en/persons/72382

No 2023-003, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We introduce a survey instrument to measure earnings risk allowing for the possibility of quitting or being fired from the current job. We find these transitions to be the key drivers of subjective risk. A link with administrative data provides multiple credibility checks and reveals that subjective earnings risk varies systematically across the population. It is also many times smaller than traditional estimates even when conditioning richly on demographics and job history. We show that subjective earnings risk can help explain why many hold limited liquid assets.

Keywords: earnings risk; job transitions; subjective expectations (search for similar items in EconPapers)
JEL-codes: D31 D84 E24 J31 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2023-03-03, Revised 2025-04-25
New Economics Papers: this item is included in nep-dge, nep-hrm and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://doi.org/10.20955/wp.2023.003 Full text (application/pdf)

Related works:
Working Paper: Subjective Earnings Risk (2023)
Working Paper: Subjective Earnings Risk (2023)
Working Paper: Subjective Earnings Risk (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlwp:95736

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DOI: 10.20955/wp.2023.003

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