How Risky Are Recessions for Top Earners?
- (pp. 148-53)
AbstractHow sensitive to business cycles are the earnings of top earners? And, how does the business cycle sensitivity of top earners vary by industry? We use a confidential dataset on earnings histories of US males from the Social Security Administration. On average, individuals in the top 1 percent of the earnings distribution are slightly more cyclical than the population average. But there are large differences across sectors; top earners in Finance, Insurance, and Real Estate (FIRE) and Construction face substantial business cycle volatility, whereas those in Services (who make up 40 percent of individuals in the top 1 percent) have earnings that are less cyclical than the average worker.
CitationGuvenen, Fatih, Greg Kaplan, and Jae Song. 2014. "How Risky Are Recessions for Top Earners?" American Economic Review, 104 (5): 148-53. DOI: 10.1257/aer.104.5.148
- E32 Business Fluctuations; Cycles
- J31 Wage Level and Structure; Wage Differentials