We review research on the dynamics and distribution of individual earnings and family income. We start with univariate earnings models, which dominate the literature and are often used as the exogenous component of family income in structural models of saving. We present a version of the linear...

We examine what determines the family income that men and women experience over their adult lives. To this end, we estimate a dynamic model of earnings, nonlabor income, fertility, marriage, and divorce. We use the model to address a number of important questions in labor and family economics,...

This paper uses a college-by-graduate degree fixed effects estimator to evaluate the returns to 19 different graduate degrees for men and women. We find substantial variation across degrees, and evidence that OLS overestimates the returns to degrees with high average earnings and underestimates...

There is much public discussion but almost no evidence on the effects of high school curriculum on postsecondary education and on success in the labor market. I use the large variation in curriculum across US high schools to identify the effects on wages and educational attainment of specific...

The vast literature on human capital and earnings assumes that individuals know in advance that they will complete a particular program of schooling. This paper treats education as a sequential choice that is made under uncertainty. A simple two period structural model is used to explore the...

We consider four models of consumption that differ with respect to efficient risk-sharing and altruism. They range from complete markets with altruism to family risk-sharing. We use a matched sample of parents and independent children available from the Panel Study of Income Dynamics to...

Using the Panel Study of Income Dynamics, we find that true wage changes have many fewer nominal cuts and more nominal freezes than reported nominal wage changes. The data overwhelmingly rejects a model of flexible wage changes and provides some evidence against a model of perfect downward...

This paper addresses two questions. First, what are the key factors that affect a consumer's lifetime budget constraint and how do they evolve over the lifecycle? Second, how do consumers respond to changes in these factors? We examine the permanent income hypothesis and the Keynesian...

In a labor market in which firms offer tied hours-wage packages and there is substantial dispersion in the wage offers associated with a particular type of job, the best job available to a worker at a point in time may pay well but require an hours level which is far from the worker's labor...

This paper tests the rational expectations lifecycle model of consumption against (1) a simple Keynesian model and (ii) the rational expectations lifecycle model with imperfect capital markets. The tests are based upon the relative responsiveness of consumption to income changes which can be...