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The PSID and Income Volatility: Its Record of Seminal Research and Some New Findings

TitleThe PSID and Income Volatility: Its Record of Seminal Research and Some New Findings
Publication TypeJournal Article
Year of Publication2018
AuthorsMoffitt, R, Zhang, S
JournalAnnals of the American Academy of Political and Social Science
Volume680
Pagination48-81
Type of ArticleArticle
ISBN Number00027162 (ISSN)
Keywordsearnings volatility, permanent variance, PSID, semiparametric model, Transitory variance
Abstract

The Panel Study of Income Dynamics (PSID) has made more contributions to the study of income volatility than any other dataset in the United States. Its record of providing data for seminal research is unmatched. In this article, we first present the reasons that the PSID has made such major contributions to research on the topic. Then we review the major papers that have used the PSID to study income volatility, comparing their results to those using other datasets. Last, we present new results for income volatility among U.S. men through 2014, finding that both gross volatility and the variance of transitory shocks display a three-phase trend: upward trends from the 1970s to the 1980s, a stable period in the 1990s through the early 2000s, and a large increase during the Great Recession. © 2018 by The American Academy of Political and Social Science.