TY  - JOUR
AU  - Shiller,Robert J.
AU  - Schneider,Ryan
TI  - Labor Income Indices Designed for Use in Contracts Promoting Income     Risk Management
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5254
PY  - 1995
Y2  - September 1995
UR  - http://www.nber.org/papers/w5254
L1  - http://www.nber.org/papers/w5254.pdf
N1  - Author contact info:
Robert J. Shiller
Yale University, Cowles Foundation
Box 208281
30 Hillhouse Avenue
New Haven, CT  06520-8281
Tel: 203/432-3708
Fax: 203/432-6167
E-Mail: robert.shiller@yale.edu
AB  - Labor income indices are created for groupings of individuals, using data from the Panel Study of Income Dynamics.  People are grouped by a clustering algorithm based on an estimated transition matrix between jobs, by education level, and by skill category.  The groupings are defined so that relatively few people move between them. For each of the groupings, we generate a labor income index using a hedonic repeated-measures regression methodology.  Similarities between pairs of indices and between indices and individual labor incomes are described.  It is argued that indices like those presented here might someday be used in settlement formulae in contracts promoting income risk management.
ER  -