State of the State 2017

Article

Methodology

State of the State 2017

An unexpected decline in income relative to expenses tests the resilience of households as much as an unexpected bill. Unpredictable income also lessens resilience by reducing households’ ability to plan and make long-term investments.

Income volatility is a growing area of international research, with many US studies finding that the share of households experiencing a fall in income year-to-year has increased markedly since the 1970s. One study noted that for all the recent attention on income inequality, the instability of incomes had actually risen faster.

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