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Match Bias from Earnings Imputation in the Current Population Survey: The Case of Imperfect Matching

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Author Info
Christopher R. Bollinger (University of Kentucky)
Barry T. Hirsch (Trinity University)

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Abstract

This article examines match bias arising from earnings imputation. Wage equation parameters are estimated from mixed samples of workers reporting and not reporting earnings, the latter assigned earnings of donors. Regressions including attributes not used as imputation match criteria (e.g., union) are severely biased. Match bias also arises with attributes used as match criteria but matched imperfectly. Imperfect matching on schooling (age) flattens earnings profiles within education (age) groups and creates jumps across groups. Assuming conditional missing at random, a general analytic expression correcting match bias is derived and compared to alternatives. Reweighting a respondent-only sample proves an attractive approach.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Labor Economics.

Volume (Year): 24 (2006)
Issue (Month): 3 (July)
Pages: 483-520
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:ucp:jlabec:v:24:y:2006:i:3:p:483-520

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Horowitz, Joel & Manski, Charles, 1997. "Nonparametric Analysis of Randomized Experiments With Missing Covariate and Outcome Data," Working Papers 97-16, University of Iowa, Department of Economics.
  2. Clark, Melissa A. & Jaeger, David A., 2002. "Natives, the Foreign-Born and High School Equivalents: New Evidence on the Returns to the GED," IZA Discussion Papers 477, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Aigner, Dennis J., 1973. "Regression with a binary independent variable subject to errors of observation," Journal of Econometrics, Elsevier, vol. 1(1), pages 49-59, March. [Downloadable!] (restricted)
  4. Barry T. Hirsch & Edward J. Schumacher, 2004. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 689-722, July. [Downloadable!]
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  5. Willis, Robert J., 1987. "Wage determinants: A survey and reinterpretation of human capital earnings functions," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 10, pages 525-602 Elsevier. [Downloadable!] (restricted)
  6. Richard B. Freeman, 1983. "Longitudinal Analyses of the Effects of Tade Unions," NBER Working Papers 1207, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Hirsch, Barry T., 2004. "Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills," IZA Discussion Papers 1261, Institute for the Study of Labor (IZA). [Downloadable!]
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  8. Lillard, Lee & Smith, James P & Welch, Finis, 1986. "What Do We Really Know about Wages? The Importance of Nonreporting and Census Imputation," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 489-506, June. [Downloadable!] (restricted)
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  9. Molinari, Francesca, 2005. "Missing Treatments," Working Papers 05-11, Cornell University, Center for Analytic Economics. [Downloadable!]
  10. Murphy, Kevin M & Welch, Finis, 1990. "Empirical Age-Earnings Profiles," Journal of Labor Economics, University of Chicago Press, vol. 8(2), pages 202-29, April. [Downloadable!] (restricted)
  11. Marco Manacorda, 2004. "Can the Scala Mobile Explain the Fall and Rise of Earnings Inequality in Italy? A Semiparametric Analysis, 19771993," Journal of Labor Economics, University of Chicago Press, vol. 22(3), pages 585-614, July. [Downloadable!]
  12. Card, David, 1996. "The Effect of Unions on the Structure of Wages: A Longitudinal Analysis," Econometrica, Econometric Society, vol. 64(4), pages 957-79, July. [Downloadable!] (restricted)
  13. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier. [Downloadable!] (restricted)
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  14. repec:att:wimass:199525 is not listed on IDEAS
  15. repec:fth:prinin:462 is not listed on IDEAS
  16. Bollinger, Christopher R., 1996. "Bounding mean regressions when a binary regressor is mismeasured," Journal of Econometrics, Elsevier, vol. 73(2), pages 387-399, August. [Downloadable!] (restricted)
  17. Horowitz, J.L. & Manski, C.F., 1995. "Censoring of Outcomes and Regressors Due to Survey Nonresponse: Identification and estimation Using Weights and Imputations," Working Papers 95-12, University of Iowa, Department of Economics.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Even, William E. & Macpherson, David A., 2009. "Is Bigger Still Better? The Decline of the Wage Premium at Large Firms," IZA Discussion Papers 4082, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Seik Kim, . "Economic Assimilation of Foreign-Born Workers in the United States: An Overlapping Rotating Panel Analysis," Working Papers UWEC-2008-19, University of Washington, Department of Economics. [Downloadable!]
  3. Hirsch, Barry & Schumacher, Edward J., 2008. "Underpaid or Overpaid? Wage Analysis for Nurses Using Job and Worker Attributes," IZA Discussion Papers 3833, Institute for the Study of Labor (IZA). [Downloadable!]
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