How Risky Are Recessions for Top Earners?

Fatih Guvenen, Greg Kaplan and Jae Song

No 19864, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How sensitive are the earnings of top earners to business cycles? And, how does the business cycle sensitivity of top earners vary by industry? We use a confidential dataset on earnings histories of US males from the Social Security Administration. On average, individuals in the top 1% of the earnings distribution are slightly more cyclical than the population average. But there are large differences across sectors: Top earners in Finance, Insurance, and Real Estate (FIRE) and Construction face substantial business cycle volatility, whereas those in Services (who make up 40% of individuals in the top 1 percent) have earnings that are less cyclical than the average worker.

JEL-codes: E2 G12 J31 (search for similar items in EconPapers)
Date: 2014-01
New Economics Papers: this item is included in nep-lab, nep-lma and nep-mac
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Citations: View citations in EconPapers (33)

Published as Fatih Guvenen & Greg Kaplan & Jae Song, 2014. "How Risky Are Recessions for Top Earners?," American Economic Review, American Economic Association, vol. 104(5), pages 148-53, May.

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