Intergenerational Inequalities in Economic Volatility

Income volatility has increased in many Western countries, with recent evidence suggesting more pronounced increases at the top of the income distribution. We study heterogeneous patterns of labor market volatility across the life course in Sweden, examining how volatility differs by parental education. Drawing on data from the Swedish Level-of-Living Survey (1995–2021), linked to administrative registers and covering 11,466 individuals, we use arc percentage change measures to capture earnings fluctuations, including periods of zero earnings.Our findings reveal that individuals from advantaged backgrounds experience higher labor market volatility throughout their working lives, particularly during early career stages.However, this volatility differs qualitatively: advantaged groups experience substantially more positive income changes, with upward movements outweighing negative shocks.Suggesting that rising volatility at the top partly reflects income mobility, rather than insecurity.