Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/217152
Authors: 
Gong, Yifan
Stinebrickner, Todd R.
Stinebrickner, Ralph
Year of Publication: 
2019
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 10 [Year:] 2019 [Issue:] 2 [Pages:] 607-641
Abstract: 
We use unique data from the Berea Panel Study to characterize how much earnings uncertainty is present for students at college entrance and how quickly this uncertainty is resolved. We characterize uncertainty using survey questions that elicit the entire distribution describing one's beliefs about future earnings. Taking advantage of the longitudinal nature of the expectations data, we find that roughly two-thirds of the income uncertainty present at the time of entrance remains at the end of college. Taking advantage of a variety of additional survey questions, we provide evidence about how the resolution of income uncertainty is influenced by factors such as college GPA and college major, and also examine why much income uncertainty remains unresolved at the end of college. This paper also contributes to a literature interested in understanding the relative importance of uncertainty and heterogeneity in determining observed earnings distributions.
Subjects: 
Income uncertainty
uncertainty resolution
heterogeneity
expectations data
JEL: 
J30
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Article

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