Average real UK household income has almost doubled over the past forty years. With four decades of micro-data on household incomes, and relatively simple decomposition methods, we document the contribution to this growth in the mean net household income of working-age households from different...

This paper investigates the importance of heterogeneity in the labor earning shock processes. We analyze the earning shock process for both male and female workers in several countries. We argue that unlike time series analysis, in a life cycle model the forecasting horizon is finite and in...