A growing body of research shows that income predictability for low-and moderate-income Americans is low and getting worse

Income Volatility

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Heather Hill | University of Washington

“There is some evidence to suggest that [income] variability puts families, and particularly children, at risk by making it difficult to make consistent investments in well-being and by increasing levels of stress.”

Income Volatility

● Summary

A growing body of research shows that month-to-month income fluctuates wildly for low-and moderate-income Americans. This unpredictable income significantly impacts the financial lives of these individuals making it hard for them to meet monthly expenses, save, pay down debt, qualify for a loan, or handle a major unexpected expense.

No consensus exists among researchers or policymakers regarding the extent of the problem, however, nor why it matters, and how industry, government, and other stakeholders should respond.

Through a combination of online surveys, in-person convenings, and research, EPIC hopes to answer the following questions concerning the impact that income volatility has on the emotional and financial lives of Americans across the country:

  • What work, family, or other factors are most likely to trigger volatility and what coping strategies have been most popular and effective for American families?
  • Is financial innovation part of the solution? If yes, what kind of financial products are most likely to help? Should they take the form of savings, credit, insurance, or some combination of all three?
  • Will changing employment practices around predictable scheduling and worker benefits mitigate or exacerbate volatility?
  • Should governments consider changing public benefit design to account for unrepresentative weekly and monthly paystubs, or perhaps update social insurance programs to account for the fact that unemployment and old-age are no longer the sole drivers of financial insecurity?
  • What is the role for financial education and coaching? Should individuals themselves be doing more to prepare for income changes and smooth their consumption?

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What We Know

● Issue Brief

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Expert Takes

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Survey Results

● Report

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Data Visualizations

● Interactive Charts & Infographics

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EPIC
INCOME VOLATILITY|CONSUMER DEBT

Income volatility is not a discrete, boutique problem. It's a new normal for American households.

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