U.S. long‐term earnings outcomes by sex, race, ethnicity, and place of birth

Abstract

This paper is part of the Global Repository of Income Dynamics (GRID) project cross‐country comparison of earnings inequality, volatility, and mobility. Using data from the U.S. Census Bureau's Longitudinal Employer‐Household Dynamics (LEHD) infrastructure files, we produce a uniform set of earnings statistics for the U.S. From 1998 to 2019, we find U.S. earnings inequality has increased and volatility has decreased. The combination of increased inequality and reduced volatility suggest earnings growth differs substantially across different demographic groups. We explore this further by estimating 12‐year average earnings for a single cohort of age 25–54 eligible workers. Overall, differences in labor supply (hours paid and quarters worked) are found to explain almost 90% of the variation in worker earnings at the mean, although substantial earnings differences across and within groups remain unexplained. Using a quantile regression approach, we estimate counterfactual earnings distributions for each demographic group. We find that at the bottom of the earnings distribution differences in characteristics such as hours paid, geographic division, industry, and education explain almost the entire earnings gap; however, above the median the contribution of the differences in the returns to characteristics is the dominant component.

Inequality and earnings dynamics in France: National policies and local consequences

“…Interestingly, the level of inequality is relatively low in France compared to other developed countries. The P90-10 differential of log labor earnings is on average 171 log points for men and 177 log points for women over our sample period, a level much lower than what is found in the United States and comparable to that of Norway (see McKinney, Abowd, and Janicki (2022) and Halvorsen, Ozkan, and Salgado (2022)). It also appears to be close to that prevailing in a Gaussian distribution, especially for women (the P90-10 is close to 2.56 standard deviation).…”

The evolution of the earnings distribution in a volatile economy: Evidence from Argentina

“…Kopczuk, Saez, and Song (2010) find that long-term mobility in the U.S. has increased overall but slightly decreased for men over the second half of the 20th century. Compared with recent evidence on earnings mobility in the U.S. (McKinney, Abowd, and Janicki (2021)) and Canada (Bowlus, Gouin-Bonenfant, Liu, Lochner, and Park (2021)), our findings document significantly higher 10-year earnings mobility among workers in the bottom quartile of the earnings distribution in Argentina. We find that both upward and downward mobility are higher for younger workers and comparable between men and women.…”

Inequality and income dynamics in Germany

“…This tilted U‐shape is consistent with findings for Sweden, Denmark, Norway, France, and the US (Friedrich, Laun, and Meghir (2021), Leth‐Petersen and Sæverud (2021), Halvorsen, Ozkan, and Salgado (2021), Kramarz, Nimier‐David, and Delemotte (2021), McKinney, Abowd, and Janicki (2021)).…”

“…Besides its pro‐cyclicality, which has been documented before (e.g., Guvenen, Ozkan, and Song (2014), Busch et al (2022)), it is noteworthy that after 2005 the Kelley skewness of earnings growth is more positive than before as well as compared to other countries (e.g., Italy, Spain, Sweden, UK, US; see Hoffmann, Malacrino, and Pistaferri (2021), Arellano et al (2021), Friedrich, Laun, and Meghir (2021), Bell, Bloom, and Blundell (2021), McKinney, Abowd, and Janicki (2021)) 28 . This reflects the good overall labor market conditions in Germany over this time period (Figure A.2).…”