No . 1429 - 15 Income Volatility in U . S . Households with Children : Another Growing Disparity between the Rich and the Poor ? Pamela

In this paper, we sought to document household income volatility as experienced by children over time, as one understudied aspect of household economic circumstances that might contribute to observed socioeconomic differences in children’s achievement. Our analysis of six panels of the nationally representative Survey of Income and Program Participation (SIPP) across a 25-year period reveal that income volatility may be an additional factor contributing to the gap between the achievement of rich and poor children: We find that households with children at the 10th percentile of income have experienced increasing volatility across the last 25 years while their affluent peers at the 90th percentile have experienced declining income volatility. Our sensitivity analyses show that these findings are robust to a number of differing analytic approaches and are not due to the changing racial/ethnic composition of lowincome households over this same time period.