Hryshko, Dmytro - In: Quantitative economics : QE ; journal of the … 3 (2012) 2, pp. 177-209
Idiosyncratic labor incomes are typically modeled either by stochastic processes with heterogeneous income profiles (HIPs) or restricted income profiles (RIPs). The HIP assumes that individual labor income grows deterministically at an unobserved rate and contains a persistent but stationary...