Nominal wage stickiness is an important component of recent medium-scale structural macroeconomic models, but to date there has been little microeconomic evidence supporting the as- sumption of sluggish nominal wage adjustment. We present evidence on the frequency of nominal wage adjustment...

By 1989 the Michigan Panel Study on Income Dynamics (PSID) had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership. We study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the...

Some public policies aimed at integrating welfare recipients into the world of work are predicated on the premise that getting welfare recipients to work will change their beliefs about how they will be treated in the labor market. This paper explores the rationale for these policies and...

This paper presents a framework for the evaluation and measurement of reversal and origin independence as separate aspects of economic mobility. We show how that evaluation depends on aversion to multi-period inequality, aversion to inter-temporal fluctuations, and aversion to second-period...

We use the Michigan Panel Data Study on Income Dynamics to decompose the well-known rise in cross-sectional variance of individual male earnings in the U.S. into permanent and transitory components. We find that about half of the increase has arisen from an increase in the variance of permanent...

We derive the efficiency loss from using grouped data to estimate coefficients of variables that vary across groups but not individuals within a group (e.g., state unemployment rates) when micro data are unavailable on the dependent variable. We present an empirical example of our theoretical...

This paper asks whether wage subsidies encourages participants to move into jobs with greater wage growth. We provide an analytical framework that identifies the key causal links between earnings subsidies and both within-and between-job wage growth. This framework highlights the importance of...

Measures of inequality and mobility based on self-reported earnings reflect attributes of both the joint distribution of earnings across time and the joint distribution of measurement error and earnings. While classical measurement error would increase measures of inequality and mobility there...

This paper asks two questions about child poverty dynamics. The first is whether long-run transitions out of poverty have changed. The second is whether the events associated with exits from poverty have changed. We use the Panel Study of Income Dynamics to contrast the patterns of children 0 to...