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ERIC Number: ED574664
Record Type: Non-Journal
Publication Date: 2012-Aug
Pages: 45
Abstractor: As Provided
Reference Count: 68
ISSN: ISSN-1936-9379
Childhood Income Volatility and Adult Outcomes. University of Kentucky Center for Poverty Research Discussion Paper Series, DP2012-03
Hardy, Bradley
University of Kentucky Center for Poverty Research
Using data linked across generations in the Panel Study of Income Dynamics, I estimate the relationship between exposure to volatile income during childhood and a set of socioeconomic outcomes in adulthood. The empirical framework is an augmented intergenerational income mobility model that includes controls for income volatility. I measure income volatility at the family level in two ways. First, instability as measured by squared deviations around a family-specific mean, and then as percent changes of 25 percent or more. Volatility enters the model both separately and interacted with income level. I find that family income instability during childhood has a small, positive association with high school dropout--one which appears driven by volatility among children from lower income households. Evidence suggests that volatility exposure generally has a minimal impact on intergenerational outcomes relative to permanent income.
University of Kentucky Center for Poverty Research. 302D Mathews Building, Lexington, KY 40506. Tel: 859-257-7641; Fax: 859-257-6959; e-mail:; Web site:
Publication Type: Reports - Research
Education Level: High Schools; Secondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: University of Kentucky Center for Poverty Research
Identifiers - Location: Michigan