Inequality in Lifetime Earnings, 1986-2012

Moshe Justman and Hadas Stiassnie ()
Additional contact information
Hadas Stiassnie: Ben Gurion University

No 579, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: We estimate yearly inequality in anticipated lifetime earnings—a lower bound on “true†inequality that would apply if earnings could be transferred freely over time—using a two-stage approach that first estimates the lifetime earnings of males born between 1942-87, from PSID data to 2018; and then measures inequality in these lifetime earnings estimates among males aged 25-59 in each year between 1986 and 2012. Comparing it to conventionally measured inequality in annual earnings, we find that yearly variances of log lifetime earnings are, on average, less than half the variances of log annual earnings, and much more stable, rising by only 11 percent throughout the period, where inequality in annual earnings increased by 46 percent after 1998, indicating a corresponding increase in intertemporal mobility. This dynamic pattern varies markedly from inequality in lifetime earnings measured within ten-year cohort-groups, which first rose by 40 percent from the earliest, 1942-51 cohort-group to the 1958-67 cohort-group, then declined by 26 percent for the youngest, 1978-87 cohort-group.

Keywords: Earnings inequality; lifetime earnings; earnings volatility; PSID (search for similar items in EconPapers)
JEL-codes: D31 I32 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2021-04
New Economics Papers: this item is included in nep-his and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ecineq.org/milano/WP/ECINEQ2021-579.pdf First version, 2021 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2021-579

Access Statistics for this paper

More papers in Working Papers from ECINEQ, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Maria Ana Lugo ( this e-mail address is bad, please contact ).