Estimates of Year-to-Year Volatility in Earnings and in Household Incomes from Administrative, Survey, and Matched Data

Abstract

We document trends in the volatility in earnings and household incomes between 1985 and 2005 in three different data sources: administrative earnings records, the Survey of Income and Program Participation (SIPP) matched to administrative earnings records, and SIPP survey data. In all data sources, we find a substantial amount of year-to-year volatility in workers’ earnings and household incomes. In the data sources that contain administrative earnings, we find that volatility has been roughly constant, and has even declined slightly, since the mid-1980s. These findings differ from what is found using survey data and what has been reported in previous studies.