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Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important is Assortative Matching?

January 2015

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The 10 most similar working papers to the working paper 'Trends in Earnings Inequality and Earnings Instability among U.S. Couples: How Important is Assortative Matching?' are listed below in order of similarity.

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  The Parental Gender Earnings Gap in the United States
  

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  Authors: Danielle H. Sandler, YoonKyung Chung, Barbara Downs, Robert Sienkiewicz

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  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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• Working Paper

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  Understanding Earnings Instability: How Important are Employment Fluctuations and Job Changes?
  

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  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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  tp-2005-03

  This paper integrates the existing literatures on displacement and health by examining the enduring effects of job dislocations that are induced by firm and individual shocks to employment. A joint estimation of hourly wage rates and weekly hours illuminates the disparities in these economic outcomes that exist between those who have reestablished themselves in the workplace subsequent to a layoff and those who have returned to work following the onset of a disability relative to those with uninterrupted job histories. As an extension of these ideas, employment transitions and workplace adjustments are modeled to capture spousal reactions to these shocks. Multiple indicators of health from the Survey of Income and Program Participation and Social Security Administrative benefits records are incorporated into the analyses of those with impairments that prompted job loss. These measures allow knowledge to be gleaned regarding the qualitative di'erences in the lasting impacts of job cessation resulting from medically diagnosed illnesses as compared to estimates uncovered using survey data sources alone. By considering time durations following these periods of separation in light of these indicators of well-being, a more comprehensive understanding of the long-run repercussions of employee-employer separation is acquired.
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• Working Paper

  
  
  Estimating Measurement Error in SIPP Annual Job Earnings: A Comparison of Census Bureau Survey and SSA Administrative Data
  

  July 2011

  Authors: John M. Abowd, Martha Stinson

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  CES-11-20

  We quantify sources of variation in annual job earnings data collected by the Survey of Income and Program Participation (SIPP) to determine how much of the variation is the result of measurement error. Jobs reported in the SIPP are linked to jobs reported in an administrative database, the Detailed Earnings Records (DER) drawn from the Social Security Administration's Master Earnings File, a universe file of all earnings reported on W-2 tax forms. As a result of the match, each job potentially has two earnings observations per year: survey and administrative. Unlike previous validation studies, both of these earnings measures are viewed as noisy measures of some underlying true amount of annual earnings. While the existence of survey error resulting from respondent mistakes or misinterpretation is widely accepted, the idea that administrative data are also error-prone is new. Possible sources of employer reporting error, employee under-reporting of compensation such as tips, and general differences between how earnings may be reported on tax forms and in surveys, necessitates the discarding of the assumption that administrative data are a true measure of the quantity that the survey was designed to collect. In addition, errors in matching SIPP and DER jobs, a necessary task in any use of administrative data, also contribute to measurement error in both earnings variables. We begin by comparing SIPP and DER earnings for different demographic and education groups of SIPP respondents. We also calculate different measures of changes in earnings for individuals switching jobs. We estimate a standard earnings equation model using SIPP and DER earnings and compare the resulting coefficients. Finally exploiting the presence of individuals with multiple jobs and shared employers over time, we estimate an econometric model that includes random person and firm effects, a common error component shared by SIPP and DER earnings, and two independent error components that represent the variation unique to each earnings measure. We compare the variance components from this model and consider how the DER and SIPP differ across unobservable components.
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• Working Paper

  
  
  Interpreting Cohort Profiles of Lifecycle Earnings Volatility
  

  April 2024

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  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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• Working Paper

  
  
  Income Effects in Labor Supply: Evidence from Child-Related Tax Benefits
  

  May 2016

  Authors: Philippe Wingender, Sara LaLumia

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  CES-16-24

  A parent whose child is born in December can claim child-related tax benefits when she files her tax return a few months later. Parents of children born in January must wait more than a year before they can receive child-related tax benefits. As a result, families with December births have higher after-tax income in the first year of a child's life than otherwise similar families with January births. This paper estimates the corresponding income effect on maternal labor supply, testing whether mothers who give birth in December work and earn less in the months following birth. We use data from the American Community Survey, the Survey of Income and Program Participation, and the 2000 Decennial Census. We find that December mothers have a lower probability of working, particularly in the third month after a child's birth. Earnings data from the SIPP indicate that an additional dollar of child-related tax benefits reduces annual maternal earnings in the year following a child's birth by approximately one dollar.
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• Working Paper

  
  
  The Timing of Teenage Births: Estimating the Effect on High School Graduation and Later Life Outcomes
  

  January 2016

  Authors: Danielle H. Sandler, Lisa Schulkind

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  CES-16-39R

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  Selection and Specialization in the Evolution of Marriage Earnings Gaps
  

  October 2015

  Authors: Kristin McCue, Chinhui Juhn

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  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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• Working Paper

  
  
  Maternal Labor Dynamics: Participation, Earnings, and Employer Changes
  

  December 2019

  Authors: Danielle H. Sandler, Nichole Szembrot

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• Working Paper

  
  
  Workplace Characteristics and Employment of Older Workers
  

  September 2012

  Authors: Kristin McCue, Chinhui Juhn

  Working Paper Number:

  CES-12-31

  As aging of the U.S. population places increased demands on public programs such as Social Security, an important question is how long older Americans are willing and able to work before they retire from the labor force. While studies based on household surveys have provided information on the role of savings, health status, pension and health insurance coverage, there is relatively little information on how workplace and employer characteristics affect the employment of older workers. In this study we use linked employer-employee data to explore the relationship between the characteristics of jobs held at age 55 and early retirement. We focus on a sample of 63-year-olds drawn from the 2005-2008 American Community Survey. We match this sample to information on their earnings, employment, employers and coworkers drawn from the Longitudinal Employer-Household Dynamics data for the years in which they age from 55 to 63. We use employment status as reported in the ACS to split the sample into those who have retired by age 63 and those who continue to work. We then examine differences between early retirees and continuing workers in the characteristics of their employment at age 55, and at how these characteristics change as they approach age 63. We find that early retirees are more likely to be employed by larger employers at age 55 than are continuers. They work for employers with somewhat higher pay than do continuers, and are less likely to have young coworkers.
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