Guvenen, Fatih; Karahan, Fatih; Ozkan, Serdar; Song, Jae - Federal Reserve Bank of New York - 2015
We study the evolution of individual labor earnings over the life cycle, using a large panel data set of earnings …. First, earnings shocks display substantial deviations from lognormality—the standard assumption in the literature on … incomplete markets. In particular, earnings shocks display strong negative skewness and extremely high kurtosis—as high as 30 …