Trends in the Transitory Variance of Male Earnings in the U.S., 1970-2004

Robert Moffitt and Peter Gottschalk

Economics Working Paper Archive from The Johns Hopkins University,Department of Economics

Abstract: We estimate the trend in the transitory variance of male earnings in the U.S. using the Michigan Panel Study of Income Dynamics from 1970 to 2004. Using both an error components model as well as simpler but only approximate methods, we find that the transitory variance started to increase in the early 1970s, continued to increase through the mid-1980s, and then remained at this new higher level through the 1990s and beyond. Thus the increase mostly occurred about thirty years ago. Its increase accounts for between 31 and 49 percent of the total rise in cross-sectional variance, depending on the time period.

Date: 2011-02
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Trends in the Transitory Variance of Male Earnings in the U.S., 1970-2004 (2011)
Working Paper: Trends in the Transitory Variance of Male Earnings in the U.S., 1970-2004 (2008)
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