Life-Cycle Variation in the Association between Current and Lifetime Earnings / Steven Haider, Gary Solon.

Format:

Book

Author/Creator:

Haider, Steven.

Contributor:

National Bureau of Economic Research.

Solon, Gary.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11943.

NBER working paper series no. w11943

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

Researchers in a variety of important economic literatures have assumed that current income variables as proxies for lifetime income variables follow the textbook errors-in-variables model. In an analysis of Social Security records containing nearly career-long earnings histories for the Health and Retirement Study sample, we find that the relationship between current and lifetime earnings departs substantially from the textbook model in ways that vary systematically over the life cycle. Our results can enable more appropriate analysis of and correction for errors-in-variables bias in a wide range of research that uses current earnings to proxy for lifetime earnings.

Notes:

Print version record

January 2006.