A risky venture: Income dynamics among pass-through business owners
By: Debacker, J., Panousi, V. and Ramnath, S
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Material type: 
BookPublisher: American Economic Journal: Macroeconomics Description: 15(1), Jan, 2023: p.444-474.Subject(s): Labor Demand, Wage Level and Structure; Wage Differentials, Tax Law, Entrepreneurship
In:
American Economic Journal: MacroeconomicsSummary: We employ a large panel of US income tax returns for the period 1987–2018 to extensively characterize and quantify business income risk. Our findings show business income to be much riskier than labor income. Business income is less persistent and is characterized by higher tail risk. Furthermore, when compared to labor income, heterogeneity across households is less important in explaining the cross-sectional variation in business income, and within-household income variation is more important. Our results underscore the income risks business owners face and provide stylized facts and parameter estimates useful for quantitative macroeconomic models and policy analysis.- Reproduced
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 15(1), Jan, 2023: p.444-474 | Available | AR128505 |
We employ a large panel of US income tax returns for the period 1987–2018 to extensively characterize and quantify business income risk. Our findings show business income to be much riskier than labor income. Business income is less persistent and is characterized by higher tail risk. Furthermore, when compared to labor income, heterogeneity across households is less important in explaining the cross-sectional variation in business income, and within-household income variation is more important. Our results underscore the income risks business owners face and provide stylized facts and parameter estimates useful for quantitative macroeconomic models and policy analysis.- Reproduced
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