EARNINGS MOBILITY AND LONG-RUN INEQUALITY - AN ANALYSIS USING MATCHEDCPS DATA

In this article we use matched cross sections from the Current Populat ion Survey (CPS) to examine patterns of short-term earnings mobility f or the period 1967-91, which we then employ to assess the impact of ri sing annual individual earnings inequality on inequality over a longer span. First, we find that less-educated individuals and blacks have m ore instability in their earnings than those who are more highly educa ted and nonblack. Second, short-term mobility levels have not undergon e major changes over the time span we examine. Third, our results sugg est that long-run inequality (calculated over five years) rose in the latter half of the 1980s. Fourth, important differences exist across d emographic groups in long-run inequality trends, with long-term inequa lity increasing most in the 1980s for less-educated males.