What Determines Earnings and Employment Risk?

Luigi Guiso, Tullio Jappelli () and Luigi Pistaferri

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Expectations and riskiness of future earnings are crucial determinants of individuals’ intertemporal choices. Yet, the empirical literature lacks reliable measures of the distribution of future income. Lacking direct observability, the latter is usually estimated inferring moments of the distribution from income realizations on panel data. In this paper we rely instead on subjective expectations available in the 1995 Survey of Household Income and Wealth, a large random sample representative of Italian households. The survey elicits information on the distribution of future earnings and the probability of employment in a very simple and parsimonious way. Based on the responses, we estimate the individual distributions of expected earnings conditional on working as well as unconditional. We can then relate various moments of these distributions to demographic and economic variables observable in the cross-section.

Keywords: Subjective expectations; income risk; unemployment (search for similar items in EconPapers)
JEL-codes: E21 (search for similar items in EconPapers)
Date: 1998-10-01
New Economics Papers: this item is included in nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of Business and Economic Statistics, April 2002, vol. 20, issue 2, pages 241-253

Downloads: (external link)
http://www.csef.it/WP/wp8.pdf (application/pdf)

Related works:
Working Paper: What Determines Earnings and Employment Risk (1998)
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:sef:csefwp:08

Access Statistics for this paper

More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Maria Carannante ().