Study: Income Fluctuation in Lower Income Individuals
An individual's income can be a moving target -- particularly in the lower income range. That's the conclusion we reached in a study of 32 million employees based on anonymized and randomly sampled data from The Work Number®.
Data from The Work Number, the nation's largest centralized database of current payroll data, allowed us to determine that 80% of those with incomes lower than the federal poverty line saw incomes change more than 10% in a single quarter. (See chart)
Insight: If you are verifying income with sources such as state wage data, you may not be getting an accurate picture of your applicants or clients. After all, state wage data is based on quarterly business reporting. Our study shows that quarter-old data may not be a current reflection of the applicant's employment situation.
Stale data could be harmful in a number of ways: Your program integrity may suffer without more up-to-date data sources. You may be at risk of denying benefits that should have been paid. In fact, the study indicates that the lower income individuals were more likely to experience a decrease in income than an increase. Overall, 40% of the individuals saw income increase in the first quarter covered in the study, but 56% saw a decrease in income.
The study highlights the value of real-time income data – data that comes directly from employers each pay period, so employment information is authentic and current. A data source that provides current pay period employment and income detail instantly allows you to validate applicant-provided information, make better informed decisions and helps improve program integrity.
For a complete copy of the study or to learn how you can find value in current employment and income information, please send an email to firstname.lastname@example.org with "Quarter-by-quarter income changes" in the subject line.