New Evidence on Earnings Volatility in Survey and Administrative Data

Despite the rise in cross-sectional inequality since the late 1990s, there is little consensus on trends in earnings volatility during this period. Using consistent samples and methods in administrative earnings data matched to the Survey of Income and Program Participation (SIPP GSF) and survey data from the Panel Study of Income Dynamics (PSID), we examine earnings volatility for men from 1978 through 2011. In contrast to the apparent inconsistency in trends across administrative and survey data in the existing literature, we find recent increases in volatility in the SIPP GSF and the PSID, though increases are larger in the PSID.