NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Income Volatility and the PSID: Past Research and New Results

Robert A. Moffitt, Sisi Zhang

NBER Working Paper No. 24390
Issued in March 2018
NBER Program(s):Public Economics

The Panel Study of Income Dynamics (PSID) has made more contributions to the study of income volatility than any other data set in the U.S. Its record of research is truly seminal. In this paper we first present the reasons that the PSID has made such major contributions to research on the topic. Then we review the major papers that have used the PSID to study income volatility and we compare their results to those using other data sets. Lastly, we present new results for male earnings volatility through 2014. We find that both gross volatility and the component consisting of only the variance of transitory shocks have experienced a large increase during the Great Recession after following similar trends to those previously established showing upward trends from the 1970s to the 1980s followed by a stable period until the Recession.

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Document Object Identifier (DOI): 10.3386/w24390

Published: Robert Moffitt & Sisi Zhang, 2018. "Income Volatility and the PSID: Past Research and New Results," AEA Papers and Proceedings, vol 108, pages 277-80.

 
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