Predictable Life-Cycle Shocks, Income Risk and Consumption Inequality

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in income explain all of the increase in inequality in the 1980s and 90s. Second, we reconcile this finding with the fact that consumption inequality did not increase much over this period. Our results support the view that many permanent changes in income are predictable for consumers, even if they look unpredictable to the econometrician, consistent with models of heterogeneous income profiles.

Iowa Alcoholic Beverages Division, 71st Annual Report, July 2004 - June 2005

Iowa Alcoholic Beverages Division, 71st Annual Report, July 2004 - June 2005

A-1A Supplemental Security Income Program, July 2006

Supplemental Security Income Program, May 2006

A-1A Supplemental Security Income Program, May 2006

Supplemental Security Income Program, May 2006

A-1A Supplemental Security Income Program, June 2006

Supplemental Security Income Program, May 2006

A-1A Supplemental Security Income Program, August 2006

A-1A Supplemental Security Income Program, August 2006

2006 Annual Report of the Superintendent of Banking

Annual report of the Iowa Division of Banking

A-1A Supplemental Security Income Program, September 2006

A-1A Supplemental Security Income Program produced by the Department of Human Services

A-1A Supplemental Security Income Program, June 2002

Monthly report from Iowa Department of Human Services on income.

A-1A Supplemental Security Income Program, January 2002

Monthly report from Iowa Department of Human Services on income.

A-1A Supplemental Security Income Program, February 2002

Monthly report from Iowa Department of Human Services on income.

A-1A Supplemental Security Income Program, March 2002

Monthly report from Iowa Department of Human Services on income.

Social spending and demographics: The role of public policies in the intergenerational redistribution of income. Empirical evidence from Spain and Catalonia

The demographic shift underway in Southern Europe requires a revision of some of the fundamental principles of the traditional welfare state. We analyze the evolution of several aspects of welfare and social expenditure over the last two decades. We find that in the context of the present demographic changes and real estate boom current social and pension policy leads to a new distribution of benefits and burdens which is highly intergenerationally unequal. We argue for a revised definition of public policy based on Musgrave's proposition as a possible rule for an intergenerationally fair distribution.

A-1A Supplemental Security Income Program, April 2002

Monthly report from Iowa Department of Human Services on income.