Abstract
Is lifetime inequality mainly due to differences across people established early in life or to differences in luck experienced over the working lifetime? We answer this question within a model that features idiosyncratic shocks to human capital, estimated directly from data, as well as heterogeneity in ability to learn, initial human capital, and initial wealth. We find that, as of age 23, differences in initial conditions account for more of the variation in lifetime earnings, lifetime wealth, and lifetime utility than do differences in shocks received over the working lifetime.
Original language | English (US) |
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Pages (from-to) | 2923-2954 |
Number of pages | 32 |
Journal | American Economic Review |
Volume | 101 |
Issue number | 7 |
DOIs | |
State | Published - Dec 2011 |
ASJC Scopus subject areas
- Economics and Econometrics
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Dive into the research topics of 'Sources of lifetime inequality'. Together they form a unique fingerprint.Datasets
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Replication data for: Sources of Lifetime Inequality
Huggett, M. (Creator), Ventura, G. (Creator) & Yaron, A. (Creator), ICPSR - Interuniversity Consortium for Political and Social Research, 2011
DOI: 10.3886/e112471, https://www.openicpsr.org/openicpsr/project/112471
Dataset
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Replication data for: Sources of Lifetime Inequality
Huggett, M. (Creator), Ventura, G. (Creator) & Yaron, A. (Creator), ICPSR, 2011
DOI: 10.3886/e112471v1, https://www.openicpsr.org/openicpsr/project/112471/version/V1/view
Dataset