Earnings Instability

We thank Fiona Greig for the initial conversations which inspired this paper. We thank Niels Gormsen, Simon Jaeger, Emir Kamenica, Greg Kaplan, Anil Kashyap, Erik Hurst, Thibaut Lamadon, Susan Lambert, Marta Lachowska, Bentley MacLeod, Alan Manning, Alex Mas, Evan Rose, Jon Roth, Danny Schneider, and Steven Woodbury for helpful conversations, and numerous seminar participants for suggestions. We thank the Data Science team at PayrollCompany and Daniel Sullivan and Sarah Kuehl at JPMorganChase Institute (JPMCI). We thank Rupsha Debnath, Felix Farb, Avik Garg, Koren Gila, Theodore Grayer, Sedona Jolly, Min Seo Kim, Jay Leeds, Paul Metzler, Michael Meyer, John Spence, Anna Volpp, and Madeline Zuckerman for excellent research assistance. We thank the Becker Friedman Institute and the Kathryn and Grant Swick Faculty Research Fund at the University of Chicago Booth School of Business for financial support. This research was made possible by the University of Chicago’s Research Computing Center cluster, by a data-use agreement between the authors and PayrollCompany, and by a data-use agreement between the authors and JPMCI, which has created de-identified data assets that are selectively available to be used for academic research. All statistics from JPMCI data, including medians, reflect cells with multiple observations. The opinions expressed are those of the authors alone and do not represent the views of JPMorgan Chase & Co or the National Bureau of Economic Research.

• September 5, 2025