Expected and realized income changes: evidence from the Dutch socio-economic panel

Present income plays an important role in the expectation of a family regarding future income level. A study of 2,000 Dutch households reveal that half of the families studied expect no change with regards to their future income. Past incomes also affect family views regarding future income changes. Many of the families studied are pessimistic in their future income as shown by a belief that they are more likely to experience a decrease in their future income. Other factors affecting future income expectations of a family include economic status, labor market status of the family head and age.