Authors: Fatih Karahan, Serdar Ozkan, and Jae Song
-
-
-
The Governance & Culture Reform hub is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.
Need to file a report with the New York Fed? Here are all of the forms, instructions and other information related to regulatory and statistical reporting in one spot.
The New York Fed works to protect consumers as well as provides information and resources on how to avoid and report specific scams.
-
-
-
The New York Fed provides a wide range of payment services for financial institutions and the U.S. government.
The New York Fed offers the Central Banking Seminar and several specialized courses for central bankers and financial supervisors.
The New York Fed has been working with tri-party repo market participants to make changes to improve the resiliency of the market to financial stress.
-
-
-
We are connecting emerging solutions with funding in three areas—health, household financial stability, and climate—to improve life for underserved communities. Learn more by reading our strategy.
The Economic Inequality & Equitable Growth hub is a collection of research, analysis and convenings to help better understand economic inequality.
The Governance & Culture Reform hub is designed to foster discussion about corporate governance and the reform of culture and behavior in the financial services industry.
-
Staff Reports
Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital
Number 908
December 2019
December 2019
JEL classification: E24, J24, J31
We study the determinants of lifetime earnings (LE) inequality in the United States, for which differences in lifetime earnings growth are key. Using administrative data and focusing on the roles of job ladder dynamics and on-the-job learning, we document that 1) lower LE workers change jobs more often, mainly driven by higher nonemployment; 2) earnings growth for job stayers is similar at around 2 percent in the bottom two-thirds of the LE distribution, whereas for job switchers it rises with LE; and 3) top LE workers enjoy high earnings growth regardless of job switching. We estimate a job ladder model with on-the-job learning featuring ex ante heterogeneity in learning ability and job ladder risk—job loss, job finding, and contact rates. We find that learning ability differences explain almost all earnings growth heterogeneity above the median, whereas ex ante heterogeneity in job ladder risk accounts for 80 percent of LE growth differences below the median.
Author Disclosure Statement(s)
Fatih Karahan
For the research that resulted in "Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital," I attest to the following:
1. Financial support for my research came entirely from my employer, the Federal Reserve Bank of New York.
2. I have not received any financial or in-kind support for this research from anyone other than the entities listed above.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant non-profit organizations or profit-making entities.
4. I have no close relative or partners who received financial support from or work in any position at any relevant entity.
5. Some of the results presented in the paper use data from the Master Earnings File at the U.S. Social Security Administration (SSA) that are not publicly available. These results have been reviewed by the SSA to ensure that no confidential information is disclosed.
Serdar Ozkan
For the research that resulted in "Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital," I attest to the following:
1. Financial support for my research came entirely from my employer, University of Toronto.
2. I have not received any financial or in-kind support for this research from anyone other than the entities listed above.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant nonprofit organizations or profit-making entities.
4. I have no close relative or partners who received financial support from or work in any position at any relevant entity.
5. Some of the results presented in the paper use data from the Master Earnings File at the U.S. Social Security Administration (SSA) that are not publicly available. These results have been reviewed by the SSA to ensure that no confidential information is disclosed.
Jae Song
The author declares that he has no relevant or material financial interests that relate to the research described in the paper "Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital."
For the research that resulted in "Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital," I attest to the following:
1. Financial support for my research came entirely from my employer, the Federal Reserve Bank of New York.
2. I have not received any financial or in-kind support for this research from anyone other than the entities listed above.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant non-profit organizations or profit-making entities.
4. I have no close relative or partners who received financial support from or work in any position at any relevant entity.
5. Some of the results presented in the paper use data from the Master Earnings File at the U.S. Social Security Administration (SSA) that are not publicly available. These results have been reviewed by the SSA to ensure that no confidential information is disclosed.
Serdar Ozkan
For the research that resulted in "Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital," I attest to the following:
1. Financial support for my research came entirely from my employer, University of Toronto.
2. I have not received any financial or in-kind support for this research from anyone other than the entities listed above.
3. I have no paid or unpaid positions as officer, director, or board member of any relevant nonprofit organizations or profit-making entities.
4. I have no close relative or partners who received financial support from or work in any position at any relevant entity.
5. Some of the results presented in the paper use data from the Master Earnings File at the U.S. Social Security Administration (SSA) that are not publicly available. These results have been reviewed by the SSA to ensure that no confidential information is disclosed.
Jae Song
The author declares that he has no relevant or material financial interests that relate to the research described in the paper "Anatomy of Lifetime Earnings Inequality: Heterogeneity in Job Ladder Risk vs. Human Capital."
By continuing to use our site, you agree to our Terms of Use and Privacy Statement. You can learn more about how we use cookies by reviewing our Privacy Statement. 
