Life-Cycle Variation in the Association between Current and Lifetime Earnings
نویسندگان
چکیده
In the year 2003 alone, the American Economic Review published 14 articles reporting regression analyses involving individual or family income variables, and the May Papers and Proceedings issue contained almost that many again. In some cases, the income variables were dependent variables; in others, they were regressors used to explain dependent variables ranging from child health in the United States to borrowing and lending behavior in Ghana. Without exception, the measured income variables were short-term values even though, in most cases, it appeared that the relevant economic construct was a longer-term value. Many influential economic studies have recognized that the use of current income as a proxy for long-run income can generate important errors-in-variables biases. Perhaps the most famous examples are the seminal studies by Franco Modigliani and Richard Brumberg (1954) and Milton Friedman (1957), which analyzed the properties of consumption functions estimated with current rather than permanent income variables as the regressors. Another instance is the literature (e.g., Lee A. Lillard, 1977) suggesting that inequality as measured in cross sections of annual earnings overstates the inequality in lifetime earnings. A recent off-
منابع مشابه
Life-Cycle Variations in the Association between Current and Lifetime Earnings – Evidence for German Natives and Guest Workers
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تاریخ انتشار 2006