The Evolution of Household Income Volatility
Year: 2007
Type: article
Study design: Observational Study
Abstract: Using data from the PSID, we find that household income has become noticeably more volatile during the past thirty years. We estimate that the standard deviation of percent changes in household income rose one-fourth between the early 1970s and early 2000s. This widening in the distribution of percent changes is concentrated in the tails of the distribution, and especially in the lower tail: Changes between the 25th and 75th percentiles are almost the same size now as thirty years ago, but changes at the 10th percentile look substantially more negative. The boost in volatility occurred throughout the 1970s, 1980s, and 1990s, albeit not at a steady pace. Households' labor earnings and transfer payments have both become more volatile over time.
Institutions: Federal Reserve, Federal Reserve Board of Governors
Language: English
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
SDG: No poverty
Open Access status: diamond
OpenAlex ID: W4300882237