Working Paper: CEPR ID: DP2512
Authors: Simon Burgess; Karen Gardiner; Stephen P. Jenkins; Carol Propper
Abstract: We provide a critique of the methods that have been used to derive measures of income risk and draw attention to the importance of demographic factors as a source of income risk. We also propose new measures of the contribution to total income risk of demographic and labour market factors. Empirical evidence supporting our arguments is provided using data from the British Household Survey.
Keywords: Income Risk; Demographic Factors; Labour Market Factors
JEL Codes: D12; D31; D84
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Excluding nonintact households (D19) | Understatement of overall income risk (G19) |
| Younger individuals (J14) | More demographic risk (J19) |
| Lower-income individuals (I32) | Greater risk from labour market events (J29) |
| Demographic factors (J11) | Income risk (G52) |
| Demographic events such as marriage, divorce, and changes in household composition (J12) | Income variability (D31) |
| Nonintact households (J12) | Income risk (G52) |
| Choice of conditioning variables (C29) | Estimated levels of income risk (D31) |