This paper studies variation in individual labor income over time using a panel vector autoregression (PVAR) in income … variation in labor income is due to residual variation in the wage rate, work hours, and unemployment hours. I also explore the … their contribution to short-run and long-run income movements. The model is estimated on a sample of male household heads …

consistent with a model of quality-quantity of leisure, where individuals substitute quality for quantity as their income rises. …