Volatility Re-estimated

In light of this study from several Brookings scholars, Jacob Hacker is now revising his estimate of the increase in income volatility downward. There continues to be substantial dispute about precisely how to measure this, with some people seeing essentially no increase in volatility.

I can't find it now in the Prospect archives because of their redesign, but this is why when the Hacker's The Great Risk Shift initially came out I was a bit skeptical of the wisdom of grounding progressive policy too deeply in this thesis (sidebar: the risk shift thesis itself only partially hinges on the technical question at issue here). I didn't -- and still don't -- have the statistical chops to properly understand the question about the data here, but I did know that Hacker was overwhelmingly putting forward policy proposals that I would have supported whether or not there had been a large increase in income volatility since the 1970s. And I still feel that way today! Whether we use Hacker's old estimate, Hacker's new estimate, the Elmendorf / Dynan / Sichel estimate, or even a lower estimate things like a system of national health insurance and measures to help the laid-off bounce back and survive the transition still make sense.