Monthly household income volatility in the U.S., 1991/92 vs. 2002/03

Abstract

We investigate changes in monthly income volatility in non-elderly households in the U.S. since the early 1990s. Using the Survey of Income and Program Participation (SIPP), we find that monthly income volatility is highest for lower income households, and that it increased substantially for these households between 1992 and 2003. The increase appears to have its roots in the shift of household income away from relatively stable public assistance (AFDC/TANF) benefits and towards earnings. We subject these findings to sensitivity analyses and find similar results. We also find increases in volatility among households with incomes above the poverty line, but these findings are less robust in the face of some sensitivity analyses.poverty, income volatility, income assistance, welfare reform