Despite the notable increase in earnings volatility and the attention paid to the growing ranks of the uninsured, the relationship between career earnings and short- and mediumrun health insurance status has been ignored due to a lack of data. I use a new dataset, the SIPP Gold Standard File, that merges health insurance status and demographics from the Survey of Income and Program Participation with career earnings records from the Social Security Administration (SSA) and the Internal Revenue Service (IRS) to examine the relationship between long-run family earnings volatility and health insurance coverage. I find that more volatile career earnings are associated with an increased probability of experiencing an uninsured episode, with larger effects for men, young workers, and the unmarried. These findings are consistent with the 'scarring' literature, and suggest the importance of safety-net measures for job losses and health insurance coverage.
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An Analysis of Sample Selection and the Reliability of Using Short-term Earnings Averages in SIPP-SSA Matched Data
December 2011
Working Paper Number:
CES-11-39
In this paper, we document the extent to which the sample of the Survey of Income and Program Participation that is matched to the Social Security Administration's administrative earnings records is nationally representative. We conclude that the match bias is small, so selection is not a serious concern. The matched sample over-represents individuals who are wealthy, who have financial assets or who have received a government-transfer and under-represents individuals who attrited from the SIPP. We use this matched sample to examine the relationship between short-term averages of earnings from the SIPP earnings and average lifetime earnings from the administrative records. Our estimates suggest that using short averages of earnings may understate the effects of permanent income on particular outcomes of interest.
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Trends in Earnings Volatility using Linked Administrative and Survey Data
August 2020
Working Paper Number:
CES-20-24
We document trends in earnings volatility separately by gender in combination with other characteristics such as race, educational attainment, and employment status using unique linked survey and administrative data for the tax years spanning 1995-2015. We also decompose the variance of trend volatility into within- and between-group contributions, as well as transitory and permanent shocks. Our results for continuously working men suggest that trend earnings volatility was stable over our period in both survey and tax data, though with a substantial countercyclical business-cycle component. Trend earnings volatility among women declined over the period in both survey and administrative data, but unlike for men, there was no change over the Great Recession. The variance decompositions indicate that nonresponders, low-educated, racial minorities, and part-year workers have the greatest group specific earnings volatility, but with the exception of part-year workers, they contribute least to the level and trend of volatility owing to their small share of the population. There is evidence of stable transitory volatility, but rising permanent volatility over the past two decades in male and female earnings.
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Understanding Earnings Instability: How Important are Employment Fluctuations and Job Changes?
August 2009
Working Paper Number:
CES-09-20
Using three panel datasets (the matched CPS, the SIPP, and the newly available Longitudinal Employment and Household Dynamics (LEHD) data), we examine trends in male earnings instability in recent decades. In contrast to several papers that find a recent upward trend in earnings instability using the PSID data, we find that earnings instability has been remarkably stable in the 1990s and the 2000s. We find that job changing rates remained relatively constant casting doubt on the importance of labor market 'churning.' We find some evidence that earnings instability increased among job stayers which lends credence to the view that greater reliance on incentive pay increased instability of worker pay. We also find an offsetting decrease in earnings instability among job changers due largely to declining unemployment associated with job changes. One caveat to our findings is that we focus on men who have positive earnings in two adjacent years and thus ignore men who exit the labor force or re-enter after an extended period. Preliminary investigation suggests that ignoring these transitions understates the rise in earnings instability over the past two decades.
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The Impact of Unemployment Insurance Extensions On Disability Insurance Application and Allowance Rates
March 2013
Working Paper Number:
CES-13-10
Both unemployment insurance (UI) extensions and the availability of disability benefits have disincentive effects on job search. But UI extensions can reduce the efficiency cost of disability benefits if UI recipients delay disability application until they exhaust their unemployment benefits. This paper, the first to focus on the effect of UI extensions on disability applications, investigates whether UI eligibility, extension, and exhaustion affect the timing of disability applications and the composition of the applicant pool. Jobless individuals are significantly less likely to apply to Social Security Disability Insurance (SSDI) during UI extensions, and significantly more likely to apply when UI is ultimately exhausted. Healthier potential applicants appear more likely to delay, as state allowance rates increase after a new UI extension. Simulations find that a 13-week UI extension decreases SSDI and Medicare costs, offsetting about half of the increase in UI payments; this suggests that the benefits of UI extensions may be understated ' permanent disability benefits are diverted to shorter-run unemployment benefits and, potentially, new jobs, while easing the burden on the nearly insolvent SSDI Trust Fund.
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The Parental Gender Earnings Gap in the United States
January 2017
Working Paper Number:
CES-17-68
This paper examines the parental gender earnings gap, the within-couple differences in earnings over time, before and after the birth of a child. The presence and timing of children are important components of the gender wage gap, but there is selection in both decisions. We estimate the earnings gap between male and female spouses over time, which allows us to control for this timing choice as well as other shared external earnings shifters, such as the local labor market. We use Social Security Administration Detail Earnings Records (SSA-DER) data linked to the Survey of Income and Program Participation (SIPP) to examine a panel of earnings from 1978 to 2011 for the individuals in the SIPP sample. Our main results show that the spousal earnings gap doubles between two years before the birth of the first child and the year after that child is born. After the child's first year of life the gap continues to grow for the next five years, but at a much slower rate, then tapers off and even begins to fall once the child reaches school-age.
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Selection and Specialization in the Evolution of Marriage Earnings Gaps
October 2015
Working Paper Number:
CES-15-36
We examine changes in marriage and earnings patterns across four cohorts born between 1936 and 1975, using data from a series of Survey of Income and Program Participation panels linked to administrative data on earnings. We find that for both men and women, marriage has become increasingly positively associated with education and earnings potential. We compare ordinary least squares (OLS) and fixed effect (FE) estimates of the earnings differential associated with marriage. We find that the marriage earnings gap fell for women in fixed-effect estimates implying that the impact of specialization has diminished over time. We also find that increasingly positive selection into marriage means that OLS estimates overstate the reduction in the marriage earnings gap. While our findings imply that marriage is no longer associated with lower earnings among women without minor children in our most recent cohort, the motherhood gap remains large. Among men, we find that the marriage premium actually increases for more recent birth cohorts in fixed-effects regressions.
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Planning Parenthood: The Affordable Care Act Young Adult Provision and Pathways to Fertility
January 2017
Working Paper Number:
CES-17-65
This paper investigates the effect of the Affordable Care Act young adult provision on fertility and related outcomes. The expected effect of the provision on fertility is not clear ex ante. By expanding insurance coverage to young adults, the provision may affect fertility directly through expanded options for obtaining contraceptives as well as through expanded options for obtaining pregnancy-, birth-, and infant-related care, and these may lead to decreased or increased fertility, respectively. In addition, the provision may also affect fertility indirectly through marriage or labor markets, and the direction and magnitude of these effects is difficult to determine. This paper considers the effect of the provision on fertility as well as the contributing channels by applying difference-in-differences-type methods using the 2008-2010 and 2012-2013 American Community Survey, 2006-2009 and 2012-2013 Centers for Disease Control and Prevention abortion surveillance data, and 2006-2010 and 2011-2013 National Survey of Family Growth. Results suggest that the provision is associated with decreases in the likelihood of having given birth and abortion rates and an increase in the likelihood of using long-term hormonal contraceptives.
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Interpreting Cohort Profiles of Lifecycle Earnings Volatility
April 2024
Working Paper Number:
CES-24-21
We present new estimates of earnings volatility over time and the lifecycle for men and women by race and human capital. Using a long panel of restricted-access administrative Social Security earnings linked to the Current Population Survey, we estimate volatility with both transparent summary measures, as well as decompositions into permanent and transitory components. From the late 1970s to the mid 1990s there is a strong negative trend in earnings volatility for both men and women. We show this is driven by a reduction in transitory variance. Starting in the mid 1990s there is relative stability in trends of male earnings volatility because of an increase in the variance of permanent shocks, especially among workers without a college education, and a more attenuated trend decline among women. Cohort analyses indicate a strong U-shape pattern of volatility over the working life, which comes from large permanent shocks early and later in the lifecycle. However, this U-shape shifted downward and leftward in more recent cohorts, the latter from the fanning out of lifecycle transitory volatility in younger cohorts. These patterns are more pronounced among White men and women compared to Black workers.
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Parental Earnings and Children's Well-Being and Future Success: An Analysis of the SIPP Matched to SSA Earnings Data
April 2011
Working Paper Number:
CES-11-12
We estimate the association between parental earnings and a wide variety of indicators of child well-being using data from the Survey of Income and Program Participation (SIPP) matched to administrative earnings records from the Social Security Administration. We find that the use of longer time averages of parent earnings leads to substantially higher estimated effects compared to using only a single year of parent earnings. This suggests that previous studies may have understated the potential efficacy of income support programs to improve child well-being. Further, policy makers should take into account the attenuation bias when comparing studies that use different time spans to measure parental income. Using 7 year time averages of parent earnings, we show for example, that a doubling of parent earnings reduces the probability of a teenager reporting being in poor health by close to 50 percent and a child having insufficient food by 75 percent.
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Response Error & the Medicaid undercount in the CPS
December 2016
Working Paper Number:
carra-2016-11
The Current Population Survey Annual Social and Economic Supplement (CPS ASEC) is an important source for estimates of the uninsured population. Previous research has shown that survey estimates produce an undercount of beneficiaries compared to Medicaid enrollment records. We extend past work by examining the Medicaid undercount in the 2007-2011 CPS ASEC compared to enrollment data from the Medicaid Statistical Information System for calendar years 2006-2010. By linking individuals across datasets, we analyze two types of response error regarding Medicaid enrollment - false negative error and false positive error. We use regression analysis to identify factors associated with these two types of response error in the 2011 CPS ASEC. We find that the Medicaid undercount was between 22 and 31 percent from 2007 to 2011. In 2011, the false negative rate was 40 percent, and 27 percent of Medicaid reports in CPS ASEC were false positives. False negative error is associated with the duration of enrollment in Medicaid, enrollment in Medicare and private insurance, and Medicaid enrollment in the survey year. False positive error is associated with enrollment in Medicare and shared Medicaid coverage in the household. We discuss implications for survey reports of health insurance coverage and for estimating the uninsured population.
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