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?

Income volatility is an emerging, critical issue for understanding financial security today. American households seem to be facing increased instability and unpredictability in their financial lives. Despite the efforts of scores of researchers, there is no consensus on the extent of volatility and how it affects individual well-being, especially among vulnerable low- and moderate-income populations. For that reason, the Aspen Institute Financial Security Program (FSP) is devoting the inaugural year of its new knowledge-synthesis initiative, the Expanding Prosperity Impact Collaborative (EPIC), to income volatility. EPIC aims to be an evidence-based, neutral forum for gaining clarity about the nature of the problem, its evolution, its significance, and our options for responding.

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The Expanding Prosperity Impact Collaborative (EPIC), an initiative of the Aspen Institute’s Financial Security Program, will target a consequential consumer finance issue to explore in depth for a defined period of time. In its inaugural year, EPIC is focusing on income volatility. EPIC’s purpose is to synthesize insights to build a more accurate understanding of how income volatility impacts low- and moderate-income families and how best to combat the most destabilizing dimensions of the problem. The EPIC process includes identification and synthesis of data, convenings of cross-sector experts, surveys of a broader group of experts and leaders, and dissemination of issue briefs. EPIC’s look at income volatility will conclude with a set of concrete recommendations for moving forward.

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While research on month-to-month income volatility is still emerging, a number of indicators point to scheduling instability – fluctuations in hours worked – as one of the key drivers of this phenomenon:

• Of those who self-reported volatile monthly incomes in a recent survey, 40% blamed an irregular work schedule for the swings.

• An analysis of banking records found that, for nearly one in four jobs...

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