For the median male worker in
the United States, the highest lifetime wages came if you entered the workforce in
1967.
Lifetime Incomes in the United
States over Six Decades
ABSTRACT: Using panel data on
individual labor income histories from 1957 to 2013, we document two empirical
facts about the distribution of lifetime income in the United States. First,
from the cohort that entered the labor market in 1967 to the cohort that
entered in 1983, median lifetime income of men declined by 10%–19%. We find
little-to-no rise in the lower three-quarters of the percentiles of the male
lifetime income distribution during this period. Accounting for rising
employer-provided health and pension benefits partly mitigates these findings
but does not alter the substantive conclusions. For women, median lifetime income
increased by 22%–33% from the 1957 to the 1983 cohort, but these gains were
relative to very low lifetime income for the earliest cohort. Much of the
difference between newer and older cohorts is attributed to differences in
income during the early years in the labor market. Partial life-cycle profiles
of income observed for cohorts that are currently in the labor market indicate
that the stagnation of lifetime incomes is unlikely to reverse. Second, we find
that inequality in lifetime incomes has increased significantly within each
gender group. However, the closing lifetime gender gap has kept overall
lifetime inequality virtually flat. The increase within gender groups is
largely attributed to an increase in inequality at young ages, and partial
life-cycle income data for younger cohorts indicate that the increase in
inequality is likely to continue. Overall, our findings point to the
substantial changes in labor market outcomes for younger workers as a critical
driver of trends in both the level and inequality of lifetime income over the
past 50 years.
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