What do we know about earnings volatility?

• Department of Economics
• Department of History
• Department of Law
• Max Weber Programme for Postdoctoral Studies
• Robert Schuman Centre for Advanced Studies
• Department of Political and Social Sciences
• Florence School of Transnational Governance
• Development and External Relations Service
• Inequality, Welfare and Social Justice

This event is organised by the Inequality, Welfare, and Social Justice interdisciplinary research cluster.

Earnings volatility refers to fluctuations over time in the earnings of individuals in some population and is a signal of income risk.

In this research seminar, Stephen P. Jenkins, Visiting Fellow at the Department of Economics, will first review recent research about earnings volatility. Whether considering income or earnings volatility, the USA stands out as a high volatility country relative to the UK and other high-income countries, but volatility levels have remained fairly constant in these countries in recent years. However, almost all volatility research to date has considered volatility from an annual perspective.

The second part of the talk will provide new evidence about earnings volatility at a higher frequency – from one month to the next – using a large new administrative record data source for the UK. One headline finding is that earnings volatility levels are distinctly high for the low earners and overlapping groups such as young people or individuals working in a low-paid occupation. These findings have relevance to the design of cash transfer support in the UK because the monthly reference periods it uses do not align with many earners’ pay periods.