Bounding Lifetime Income Using a Cross Section of Data

15 Pages Posted: 4 Nov 2003

See all articles by Daniel L. Millimet

Daniel L. Millimet

Southern Methodist University (SMU) - Department of Economics; IZA Institute of Labor Economics

Nripesh Podder

University of New South Wales

Daniel J. Slottje

Southern Methodist University (SMU) - Department of Economics

Sourushe Zandvakili

University of Cincinnati - Department of Economics

Abstract

Measures of income inequality based on current income are well known to overstate lifetime income inequality for two reasons: intracohort mobility and the shape of the age-earnings profile. Utilizing the concept of age equivalence scales along with varying assumptions concerning the extent of intracohort mobility, the method presented bounds lifetime income inequality using only cross-sectional data from the CPS, 1967-86. As a result, we are able to analyze changes in lifetime inequality over this period.

Suggested Citation

Millimet, Daniel L. and Podder, Nripesh and Slottje, Daniel J. and Zandvakili, Sourushe, Bounding Lifetime Income Using a Cross Section of Data. Review of Income and Wealth, Vol. 49, pp. 205-219, June 2003. Available at SSRN: https://ssrn.com/abstract=416202

Daniel L. Millimet (Contact Author)

Southern Methodist University (SMU) - Department of Economics ( email )

Box 750496
Dallas, TX 75275
United States
214-768-3269 (Phone)
214-768-1821 (Fax)

HOME PAGE: http:\\www.smu.edu\~millimet

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Nripesh Podder

University of New South Wales

Kensington
High St
Sydney NSW 2052
Australia

Daniel J. Slottje

Southern Methodist University (SMU) - Department of Economics ( email )

Dallas, TX 75275
United States

Sourushe Zandvakili

University of Cincinnati - Department of Economics ( email )

Carl H. Lindner Hall 2925 Campus Green Drive
PO Box 0371
Cincinnati, OH 45221-0211
United States

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