How Risky Are Recessions for Top Earners?

Fatih Guvenen, Greg Kaplan, Jae Song

NBER Working Paper No. 19864
Issued in January 2014
NBER Program(s):   AP   EFG   IFM   ME

How sensitive are the earnings of top earners to business cycles? And, how does the business cycle sensitivity of top earners vary by industry? We use a confidential dataset on earnings histories of US males from the Social Security Administration. On average, individuals in the top 1% of the earnings distribution are slightly more cyclical than the population average. But there are large differences across sectors: Top earners in Finance, Insurance, and Real Estate (FIRE) and Construction face substantial business cycle volatility, whereas those in Services (who make up 40% of individuals in the top 1 percent) have earnings that are less cyclical than the average worker.

A non-technical summary of this paper is available in the August 2014 NBER digest.  You can sign up to receive the NBER Digest by email.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19864

Published: Fatih Guvenen & Greg Kaplan & Jae Song, 2014. "How Risky Are Recessions for Top Earners?," American Economic Review, American Economic Association, vol. 104(5), pages 148-53, May. citation courtesy of

Users who downloaded this paper also downloaded these:
Aruoba and Fernández-Villaverde w20263 A Comparison of Programming Languages in Economics
Milbradt and Oehmke w19946 Maturity Rationing and Collective Short-Termism
Poterba w19930 Retirement Security in an Aging Society
Jones, Reedy, and Weinberg w19866 Age and Scientific Genius
Reinhart and Rogoff w19823 Recovery from Financial Crises: Evidence from 100 Episodes
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us