E-mail: splinter at rice.edu Mail Address: Dept. of Economics MS-22 Rice University, PO Box 1892 Houston, TX 77005-1892
				Curriculum Vitae Research Agenda Job Market Paper "Earnings Variability in the United States: One Cause of Increasing Annual Inequality" (Poster for online viewing) (Poster) ABSTRACT: This paper estimates that increasing earnings variability explains at least a third of the observed increase in annual U.S. earnings inequality during the 1970s and 1980s. Income tax panel data show increasing earnings variability over this period resulting from fluctuations among very low and very high income families, especially among those with self-employment income. Social Security Administration data give similar results for the bottom of the distribution, but when years of zero earnings are included, increasing earnings variability explains almost all of increasing inequality in the bottom half of the individual earnings distribution. Increased movement in and out of employment by men and greater relative upward mobility for some workers seem to explain much of the increase in earnings variability. Annual individual earnings inequality not only increased with variability in the 1970s and 1980s, but also fell with variability in the 1950s and early 1960s. This suggests that the U-shaped trend in income inequality observed over the past seventy years was partly caused by first a fall and then a rise in earnings variability. Publications "Income Volatility and Mobility: U.S. Income Tax Data, 1999-2007" with Victoria Bryant and John Diamond. Proceedings of the 102nd Annual Conference of the National Tax Association, 2009. ABSTRACT: How do earnings volatility and mobility impact different income groups? We describe household earnings volatility by the full distribution of percent earnings changes and contrast measures of relative and absolute mobility using a panel of U.S. income tax returns from 1999 to 2007. While earnings volatility looks similar across most of the income distribution, we find more volatility among the bottom quintile of households, mostly from earnings gains, and more volatility among the top one percent, mostly from earnings losses. In contrast to typical findings of lower relative mobility among the bottom and top quintiles, we find higher absolute earnings mobility among households at the extremes of the distribution. Other version: Baker Institute of Public Policy Working Paper. 2010. "Financial Risk Management for Investment Planning of New Commodities Considering Plant Location and Budgeting" with Javier Lavaja, Adam Adler, Jeremy Jones, Trung Pham, Kristin Smart, Michael Steele, and Miguel J. Bagajewicz, Industrial & Engineering Chemistry Research 45, no. 22 (2006): 7582-91. ABSTRACT: The classical capacity planning problem considers the determination of the initial capacity for a particular network of processes and the timing and size of the future expansions. The data used for such a model are the forecasted demands and prices of raw material and products, as well as the utility costs. This paper expands the problem to also consider plant location, transportation of raw materials, and transportation of product to consumer markets. We also add budgeting constraints, which follow the cash flow through the life of the project and allow the project to finance the expansions. Finally, we add considerations about the price of the product in different markets. To illustrate the technique, we consider the case of ethyl lactate, a green solvent. The model was made stochastic, and financial risk is managed. Completed Papers "State Pension Contributions and Fiscal Stress" ABSTRACT: States cut their pension contributions eight times more than other spending in response to fiscal stress. The cumulative impact of state undercontributions due to unexpected deficits over the last two decades explains about six percent of the total level of mid-2008 actuarial underfunding. States not paying their actuarially required contributions for reasons other than fiscal stress explains another third of mid-2008 underfunding. Investment returns do not explain this underfunding, as returns were above actuarial assumptions over the previous twenty years. This implies that most underfunding arose from insufficient employee and required government contributions to keep up with growing liabilities. Institutional differences affect state contributions, with states setting contributions by statute being less responsive to both fiscal stress and actuarial recommendations, but more responsive to union membership. "The Mortgage Interest Deduction: Trends and Impacts of the Largest Federal Housing Subsidy" (online appendix) ABSTRACT: New estimates show that the mortgage interest deduction subsidy doubled in the decade after 1976 to almost one percent of GDP and then fell by a fourth in the early 2000s. These large fluctuations were caused by inflation and tax cuts, not by explicit housing goals. Fluctuations in the mortgage interest deduction subsidy do not seem to affect home ownership rates, but instead exacerbate business cycles and are correlated with new house size dispersion and income inequality. This housing subsidy is increasingly regressive—families with incomes above $100,000 now receive 70 percent of the subsidy. Previous Version: "Mortgage Interest and Property Tax Deductions: Size and Distribution of the Largest U.S. Federal Housing Subsidies, 1970-2008" (Poster) Working Papers "Transitory Earnings over the 2001 and 2008 Recessions" with Victoria Bryant and John Diamond Showing Economic Data with Dynamic Graphs Family earnings mobility from 1980 to 1990 using income tax panel data. The graph tracks families in the panel in both 1980 and 1990, so those entering or leaving the sample (marriage, divorce, etc.) are excluded. Quintiles are staggered to show quintile to quintile movements. Bubble size shows the fraction of families and bubble color shows each group's original mean earnings in 2010 dollars. Press the play button on the bottom left. Just showing quintiles at the beginning and ending of a period conceals earnings movements along the way. This graph adds movements to 1985 quintiles. Only the initial 3rd quintile is shown to keep the graph clear. Bubble size shows the fraction of 3rd quintile families and color shows 1985 earnings (in 2010 dollars). This graph uses data from Splinter, Bryant and Diamond (2009) to show absolute earnings movements between 1999 and 2007 in the top 1%, top 0.1%, and top 0.01% (exclusive). Note the large earnings drop of the top 0.01%, which is about the top 10,000 tax units. This graph shows the relative movements of the top top 1%, top 0.1%, and top 0.01% (groups 6, 7, and 8 on the y-axis). Note that many fall to the bottom quintile and some go to other quintiles. The y-axis groups 1 to 5 are quintiles. Increased annual earnings inequality 1980-1990 using U.S. income tax panel data.