"First, starting with the first moment, we find that average earnings growth over the life cycle varies strongly with the level of lifetime earnings: the median individual by lifetime earnings experiences an earnings growth of 38% from ages 25 to 55, whereas for individuals in the 95th percentile, this figure is 230%; for those in the 99th percentile, this figure is almost 1500%.3 Second, turning to the third moment (postponing the second moment for now), we see that earnings shocks are negatively skewed, and this skewness becomes more severe as individuals get older or their earnings increase (or both). Furthermore, this increasing negativity is due entirely to upside earnings moves becoming smaller from ages 25 to 45, and to increasing “disaster” risk (the risk of a sharp fall in earnings) after age 45. Although these implications may appear quite plausible, they are not captured by a lognormal specification, which implies zero skewness. Third, studying the fourth (standardized) moment, we find that earnings changes display very high kurtosis. What kurtosis measures is most easily understood by looking at the histogram of log earnings changes, shown in Figure 1 (left panel: annual change; right panel: five-year change). Notice the sharpness in the peak of the empirical density," - Todd Hoff

http://www.newyorkfed.org/researc... - Todd Hoff