Since the 1970s, two main trends have characterized the U.S. labor market: (i) stagnating average incomes and (ii) rising income inequality. These twin trends, which have shown remarkable resilience, have spurred both active academic research into their primary causes and heated public debate over the appropriate policy responses. Yet despite this intense attention, the vast body of available empirical evidence pertains almost entirely to pointin-time measures of income, with little evidence on trends in lifetime incomes. This dearth of evidence is not because of an oversight on the part of economists. Going back at least to the 19th century (Farr (1853)), researchers have been well aware that for many questions in the social sciences, lifetime income is the relevant concept because it provides a more complete picture of an individual’s lifetime resources. Lifetime income accounts for the transitory nature of point-in-time (often annual) income and long-run economic mobility, as well as the extensive margin of participation in the labor market. For many questions, the difference between lifetime and point-in-time measures can matter greatly.
Rather, the lack of a systematic analysis of the distribution of lifetime incomes in the United States is due to the scarcity of micro data sets with sufficiently long individual income histories. Thus, to shed light on this topic, this paper begins by constructing measures of lifetime income for millions of individuals, using a 57-year-long panel (covering the period 1957–2013) of individual income histories from U.S. Social Security Administration (SSA) records. Our baseline lifetime income measure is based on 31 potential working years between ages 25 to 55, which allows us to construct lifetime income statistics for 27 yearof-birth cohorts. The first (oldest) cohort turned age 25 in 1957, and the last (youngest) cohort turned age 55 in 2013, the last year of our sample. Throughout this paper, we refer to cohorts by the year in which they turned 25.3
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