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The possible existence of trends in volatility in the U.S. labor market has been an important issue in both labor economics and macroeconomics. The Panel Study of Income Dynamics (PSID) has been the workhorse data set used to estimate trends in earnings volatility at the individual level. Studies using the PSID have generally shown upward trends in volatility. However, trends estimated with the PSID conflict with those reported from some other survey and administrative data sets, many of which have shown flat or declining trends. This paper, which is part of a group project attempting to reconcile estimates across different data sets, presents new estimates of trends in male earnings volatility in the U.S. from 1970 to 2016 from the PSID, and addresses a number of concerns with the data that might lead its estimates to differ from those obtained in other data sets. The analysis shows that upward trends in male earnings volatility were concentrated in the 1970s and 1980s, and that trends after 1990 have been modest or even non-existent, depending on whether volatility is expected to return to its mid-2000s level after jumping up in the Great Recession. Thus, volatility trends in the PSID are roughly consistent with those studies using other data sets which find flat volatility trends in the last three decades. Examinations of potential biases from unit nonresponse (i.e., attrition), item nonresponse (i.e., don't knows and refusals) and resulting imputation, and from a number of other features of the PSID that might affect its population representativeness show no evidence of significant bias from any of these factors. However, suggestive evidence that declines in volatility estimated in studies using administrative data may be a result of a larger left tail of earnings and of problematic trimming procedures used in those studies.

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As part of a set of papers using the same methods and sample selection criteria to estimate trends in male earnings volatility across a number of survey and administrative datasets, we conduct a new investigation of trends in male earnings volatility from the 1980s to 2014 using data from the Survey of Income and Program Participation (SIPP) survey and the SIPP Gold Standard File (SIPP GSF), which links the SIPP survey to administrative data on earnings. We find that the level of volatility is higher in the SIPP GSF than in the SIPP survey but that the trends are similar. Specifically, over the period where the datasets overlap between 1984 and 2012, volatility in the SIPP survey declines slightly while volatility in the SIPP GSF increases slightly but the differences are small in magnitude. Because the density of low earnings differs considerably across datasets, and volatility may vary across the earnings distribution, we estimate trends in volatility in the SIPP survey and SIPP GSF where we hold the earnings distribution fixed to resemble that in the Panel Study of Income Dynamics (PSID). We find that differences in the underlying earnings distribution explains almost all of the difference in the level of volatility between the SIPP survey and SIPP GSF and it somewhat reduces the small differences in trends.