Cited by 218Labor market dynamics and wage inequalityFinancial Literacy, Pension, Retirement AnalysisRetirement, Disability, and Employment

Life-Cycle Variation in the Association between Current and Lifetime Earnings

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Haider, Steven, Solon, Gary·2006·National Bureau of Economic Research

Abstract

Researchers in a variety of important economic literatures have assumed that current income variables as proxies for lifetime income variables follow the textbook errors-in-variables model.In an analysis of Social Security records containing nearly career-long earnings histories for the Health and Retirement Study sample, we find that the relationship between current and lifetime earnings departs substantially from the textbook model in ways that vary systematically over the life cycle.Our results can enable more appropriate analysis of and correction for errors-in-variables bias in a wide range of research that uses current earnings to proxy for lifetime earnings.

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Crossref · 10.3386/w11943

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  • Measuring children's incomes too young can yield misleading estimates of lifetime income because children with high lifetime incomes have steeper earnings profiles.

    “Measuring children's incomes when they are too young can potentially yield misleading estimates of lifetime income because children with high lifetime incomes have steeper earnings profiles (e.g., Haider and Solon 2006; Solon 1999).”

    From Mobility Report Cards: The Role of Colleges in Intergenerational Mobility (2017) · cites this paper as Haider and Solon 2006

  • If α is assumed to vary over the life cycle of the mother, the regression estimates a weighted average with weights corresponding to the distribution of the age of mothers of 10-11 year olds in the CNLSY.

    “if α is assumed to vary over the life cycle of the mother(Haider and Solon, 2006), the regression estimates a weighted average with weights corresponding to the distribution of the age of mothers of 10-11 year olds in the CNLSY.”

    From Permanent Income and the Black-White Test Score Gap (2013) · cites this paper as Haider and Solon, 2006

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Research works printed but not linked: 1

  1. Social Security Administration. Annual statistical supplement to the Social Security Bulletin. Washington, DC: Social Security Administration, 1999.

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Authors
Haider, S., & Solon, G.
Affiliations
National Bureau of Economic Research (US)
Venue
National Bureau of Economic Research
Published
2006-01
OpenAlex
W1973477639
Cited by
209
References
40
Citations by year
2026: 1 · 2025: 5 · 2024: 11 · 2023: 9 · 2022: 11 · 2021: 11 · 2020: 11 · 2019: 8 · 2018: 8 · 2017: 11 · 2016: 11 · 2015: 19 · 2014: 9 · 2013: 14 · 2012: 9
Type
report
Language
en
Open access
Locations
  • National Bureau of Economic Research (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Funders
National Institute on Aging
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
  • Social Sciences › Demography › Retirement, Disability, and Employment
Keywords
errors-in-variables bias, current earnings, lifetime earnings, life cycle, earnings history, social security records, Health and Retirement Study, earnings measurement

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