Labor Income Indices Designed for Use in Contracts Promoting Income Risk Management

Robert Shiller and Ryan Schneider
Additional contact information
Ryan Schneider: McKinsey & Co., NY

No 1110, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Labor income indices are created for groupings of individuals, using data from the Panel Study of Income Dynamics. People are grouped by a clustering algorithm based on an estimated transition matrix between jobs, by education level, and by skill category. The groups are defined so that relatively few people move between them. For each of the groupings, we generate a labor income index using a hedonic repeated-measures regression methodology. Similarities between pairs of indices and between indices and individual labor incomes are described. It is argued that indices like those presented here might someday be used in settlement formulae in contracts promoting income risk management.

Pages: 33 pages
Date: 1995-08
Note: CFP 964.
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Citations: View citations in EconPapers (2)

Published in Review of Income and Wealth (1998), 44(2): 163-182

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Related works:
Journal Article: LABOR INCOME INDICES DESIGNED FOR USE IN CONTRACTS PROMOTING INCOME RISK MANAGEMENT (1998)
Working Paper: Labor Income Indices Designed for Use in Contracts Promoting Income Risk Management (1995)
Working Paper: Labor Income Indices Designed for Use in Contracts Promoting Income Risk Management (1995)
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