Racial Differences in the Dynamics and Distribution of Adult Family Income

My project studies differences between white and black Americans in the role of marriage, fertility and labor market behavior in determining the family income individuals experience over their adult lives. In Altonji et al (2022) my co-authors and I estimate a model of individual labor earnings; marriage and divorce probabilities, fertility, and nonlabor income. We then use the model to measure the dynamic responses of marital status, earnings, and family income to various labor market shocks, education, and permanent wage heterogeneity. We also provide gender-specific estimates of the contribution of education, permanent wages, labor market shocks, spouse characteristics, spouse wage shocks, and marital histories to the variance of family income by age and over a lifetime. For both the dynamic responses and the variance decompositions, we isolate the importance of effects on marriage probabilities and spouse characteristics (sorting). In a recent paper, we have extended the analysis to study differences across birth cohorts. A focus of this work has been differences between men and women.

In the new project, my co-authors and I are extending the model, data and analysis to examine racial differences. The main date set for the project is the Panel Study of Income Dynamics (PSID).

I wish to supplement the analysis based on the PSID with analyses of the Current Population Survey. Specifically, I wish to measure trends in hours worked, wage rates, earnings, marital status, partner’s education and earnings (for those who are married or cohabiting), nonlabor income, presence of other adult family members, children, and total family income by birth cohort, race, gender, and education. As a byproduct, I hope to develop problem sets and data sets that can be used in undergraduate econometrics courses.

The RA will learn how to access the Current Population Survey from the IPUMS site, help getting the data ready for analysis, and help with regression analysis, construction of tables and figures. The job will involve some literature review.

This project is related to "The Effects of Changes in Household Structure on the Distribution of Economic Resources"