The Dynamics of Earnings in Chile

Andrea Repetto () and Cristobal Huneeus

No 251, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: This paper provides an empirical analysis of individual earnings using data from the Encuesta Suplementaria de Ingresos. We find that the predictable component of income is hump-shaped over the life-cycle, and that there are strong education effects. The unpredictable component of income can be described by a very persistent permanent shock and a transitory shock. Our estimates are built from a panel of cohorts, so we use US data from the PSID to provide a magnitude for the underestimation of the estimated variances. Surprisingly, we find that the variance of the permanent shock is almost 4 times smaller in Chile than in the US, a result, perhaps, of the relative rigidity of the Chilean labor market

Keywords: Earnings dynamics; income uncertainty (search for similar items in EconPapers)
JEL-codes: D12 D89 H54 (search for similar items in EconPapers)
Date: 2004-08-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://repec.org/esLATM04/up.17567.1082061245.pdf (application/pdf)

Related works:
Chapter: The Dynamics of Earnings in Chile (2005)
Working Paper: The Dynamics of Earnings in Chile (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:latm04:251

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