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We consider a general framework to study the evolution of wage and earnings residuals that incorporates features highlighted by two influential but distinct literatures in economics: (i) unobserved skills with changing non-linear pricing functions and (ii) idiosyncratic shocks that follow a rich...
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heterogeneity. Our model allows for four main social insurance programmes. In contrast to simpler models that attribute all income …
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higher among foreign-born workers, reflecting weaker labor market attachment and high risk of large negative shocks for low-income … generosity and usage of benefit programs declined over time, we find stronger earnings growth among low-income workers …
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decomposing income shocks into group aggregate and idiosyncratic components, allowing us to measure the extent to which each … intergenerational structure of the Panel Study of Income Dynamics. We find that over 60% of shocks to household income are potentially …
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