Earnings, Marriage, and the Variance of Family Income by Age, Gender, and Cohort
Working Paper 33122
DOI 10.3386/w33122
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For birth cohorts 1935–44, 1945–62, and 1964–74, we estimate the contribution of edu-cation; permanent heterogeneity in wage rates, employment, and hours; labor market shocks; spouse characteristics and shocks; nonlabor income shocks; and marital histories to the age profiles of the variance of family income per adult equivalent. Education and employment heterogeneity are key sources of the rise in the variance with age and across cohorts. Wage heterogeneity is important at all ages. Own characteristics and shocks matter more for men than women, while spouse characteristics and shocks matter more for women. Gender differences have declined across cohorts.