Post-War Trends in Labor Income in the Social Security Earnings Public-Use File
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Abstract
The release of the Social Security Administration’s Earnings Public-Use File (EPUF) offers an unparalleled source of information for analyzing trends in lifetime earnings patterns. The file contains summary earnings information on individual-level Social-Security-covered earnings before 1951 as well as individual-year data on covered earnings between 1951 and 2006 (Compson 2011). The data cover a random sample of 3.13 million Americans who had covered earnings in at least one year between 1951 and 2006. Over this span of years there were 10 recessions, a notable rise in women’s employment and relative earnings, an increase in early retirement followed by a trend toward later retirement, and a substantial increase in annual wage inequality. Each of these trends has affected the shape of workers’ career earnings paths, aggregate earnings subject to the Social Security tax, the accumulation of Social Security earnings credits, and Social Security benefit payments. Shifts in lifetime earnings patterns may have affected the relative attractiveness of DC-type pension plans, which are increasingly important, compared with traditional DB plans, including Social Security.
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2013 RRC