TY  - JOUR
AU  - Haider,Steven
AU  - Solon,Gary
TI  - Life-Cycle Variation in the Association between Current and Lifetime Earnings
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11943
PY  - 2006
Y2  - January 2006
UR  - http://www.nber.org/papers/w11943
L1  - http://www.nber.org/papers/w11943.pdf
N1  - Author contact info:
Steven J. Haider
Department of Economics
Michigan State University
101 Marshall Hall
East Lansing, MI 48824
Tel: 517/355-1860
Fax: 517/432-1068
E-Mail: haider@msu.edu

Gary Solon
Department of Economics
Michigan State University
East Lansing, MI 48824-1038
Tel: 517/353-9933
Fax: 517/432-1068
E-Mail: solon@msu.edu
AB  - Researchers in a variety of important economic literatures have assumed that current income variables as proxies for lifetime income variables follow the textbook errors-in-variables model. In an analysis of Social Security records containing nearly career-long earnings histories for  the Health and Retirement Study sample, we find that the relationship between current and lifetime earnings departs substantially from the textbook model in ways that vary systematically over the life cycle. Our results can enable more appropriate analysis of and correction for errors-in-variables bias in a wide range of research that uses current earnings to proxy for lifetime earnings.
ER  -