Financial Literacy Seminar Series

December 7, 2017

3:30 PM - 5:00 PM

Seminar VI | The Nature of Household Labor Income Risk

« Event's Main Page

Nicholas Turner

Senior Economist, Federal Reserve Board of Governors


George Washington University School of Business
Duquès Hall, Room 652
2201 G Street NW
(main entrance on 22nd Street between G and H Streets)


Nick Turner is a senior economist at the Federal Reserve Board of Governors. Previously, Nick worked for seven years in the Office of Tax Analysis at the U.S. Treasury Department. In his research, Nick considers how people respond to government programs and policies, such as how taxpayers learn about benefits administered through the tax code, how tax refunds affect college enrollment and how colleges and universities respond to tax benefits for higher education. Nick’s research also focuses on social mobility, examining the extent to which low-income children grow up to be low-income adults, the role the colleges and universities play in social mobility and analyzing disparities in life expectancy by income. When not thinking about economics, Nick enjoys running, spending time with his wife Lisa and chasing after their two sons, Evan and Jason.


What is the labor earnings risk that households face over the business cycle? We answer this question using detailed population level administrative data on earnings from the U.S. Internal Revenue Service from 1999-2014. By analyzing total household earnings as well as each member’s earnings, we offer several new findings.  One, house-holds face substantially less risk compared to risk inferred from only males alone. We find that households have about one-third less skewness risk and roughly half as much dispersion risk. Consistent with work analyzing male labor earnings only, we find that household skewness increases during recessions because larger earning losses are more likely and large earnings gains are less likely compared to expansions. Second, while male earnings dispersion increases during recessions, we find that there is no increase in the dispersion of household earnings during recessions compared to expansions. Third, female labor supply changes ameliorate the household’s earnings risk. Extensive margin responses help to reduce dispersion and skewness of household earnings over the business cycle.