Publication Date

April 2007


[Excerpt]-- A significant number of workers experience substantial variability in their total wage earnings from year to year. About one-in-five workers saw their earnings fall by more than 25 percent between 2002 and 2003, and about one-in-seven saw their earnings fall by more than 50 percent. Roughly the same shares of workers experienced increases in earnings of 25 percent or 50 percent.

-- Some variability in earnings stems from workers' voluntary actions, such as deciding to stay home and rear children, and some stems from involuntary events, such as the loss of a job. Moreover, earnings variability was higher for younger workers and for workers with lower levels of educational attainment.

-- The decline in macroeconomic volatility over the past several decades does not appear to have translated into lower levels of variability in workers' earnings. Since 1980, there has been little change in earnings variability for both men and women. There is some evidence that, between 1960 and 1980, earnings variability increased for men but was offset by a decrease for women. Those findings are consistent with most existing studies of the topic that use publicly available survey data, which tend to find higher levels of earnings variability for men in the 1980s and 1990s relative to the 1970s, but little change since around 1980.


Suggested Citation
U.S. Congressional Budget Office. (2007). Trends in earnings variability over the past 20 years. Washington, DC: Author.