Monthly Earnings Volatility and Household Pooling

Martin E. Andresen, Andreas Kostøl, Ross T. Milton, Corina Mommaerts and Luisa Wallossek

No 34563, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines monthly earnings volatility and its transmission to household earnings volatility using Norwegian data on the universe of monthly pay histories. We document substantial month-to-month earnings changes: within a job, while over one-quarter of months have no earnings changes, another quarter have at least a 23% change. Accounting for multiple jobs and non-employment increases volatility, while aggregating to households reduces volatility by 12-35%. Event studies around job loss and couple formation, along with decomposition and bounding exercises, show that most of this decline reflects pooling effects rather than sorting or responses to shocks.

JEL-codes: D13 D31 J12 J31 (search for similar items in EconPapers)
Date: 2025-12
Note: LS
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