What Determines Earnings and Employment Risk?

Expectations and riskiness of future earnings are crucial determinants of individuals'intertemporal choices. Yet, the empirical literature lacks reliable measures of thedistribution of future income. Lacking direct observability, the latter is usually estimatedinferring moments of the distribution from income realizations on panel data. In this paperwe rely instead on subjective expectations available in the 1995 Survey of HouseholdIncome and Wealth, a large random sample representative of ...