Sources of Lifetime Inequality

Mark Huggett, Gustavo Ventura () and Amir Yaron ()
Additional contact information
Gustavo Ventura: University of Iowa
Amir Yaron: The Wharton School, University of Pennsylvania

No 2011-020, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as heterogeneity in ability to learn, initial human capital, and initial wealth. We find that, as of age 23, differences in initial conditions account for more of the variation in lifetime earnings, lifetime wealth and lifetime utility than do differences in shocks received over the working lifetime.

Keywords: Lifetime Inequality; Human Capital; Idiosyncratic Risk (search for similar items in EconPapers)
JEL-codes: D3 D91 E21 (search for similar items in EconPapers)
Date: 2010-11
New Economics Papers: this item is included in nep-dge, nep-hrm, nep-lab and nep-ltv
Note: M
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Citations: View citations in EconPapers (13)

Forthcoming in American Economic Review

Downloads: (external link)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Hugget ... etime-inequality.pdf First version, November 16, 2010 (application/pdf)

Related works:
Journal Article: Sources of Lifetime Inequality (2011)
Working Paper: Sources of Lifetime Inequality (2007)
Working Paper: Sources of Lifetime Inequality (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hka:wpaper:2011-020

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