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Using Administrative Earnings Records to Assess Wage Data Quality in the March Current Population Survey and the Survey of Income and Program Participation

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  • Marc Roemer
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    Abstract

    The March Current Population Survey (CPS) and the Survey of Income and Program Participation (SIPP) produce different aggregates and distributions of annual wages. An excess of high wages and shortage of low wages occurs in the March CPS. SIPP shows the opposite, an excess of low wages and shortage of high wages. Exactly-matched Detailed Earnings Records (DER) from the Social Security Administration allow comparing March CPS and SIPP people’s wages using data independent of the surveys. Findings include the following. March CPS and SIPP people differ little in their true wage characteristics. March CPS and SIPP represent a worker’s percentile rank better than the dollar amount of wages. Workers with one job and low work effort have underestimated March CPS wages. March CPS has a higher level of "underground" wages than SIPP, and increasingly so in the 1990s. March CPS has a higher level of self-employment income "misclassified" as wages than SIPP, and increasingly so in the 1990s. These trends may explain one-third of March CPS’s 6-percentage-point increase in aggregate wages relative to independent estimates from 1993 to 1995. Finally, the paper delineates March CPS occupations disproportionately likely to be absent from the administrative data entirely or to "misclassify" self-employment income as wages.

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    File URL: ftp://ftp2.census.gov/ces/tp/tp-2002-22.pdf
    File Function: First version, 2002
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    Bibliographic Info

    Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Longitudinal Employer-Household Dynamics Technical Papers with number 2002-22.

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    Length: 29 pages
    Date of creation: Nov 2002
    Date of revision:
    Handle: RePEc:cen:tpaper:2002-22

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    Keywords: March Current Population Survey (CPS); Survey of Income and Program Participation (SIPP); data quality; wages; administrative data;

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    Cited by:
    1. Richard Bavier, 2008. "Reconciliation of income and consumption data in poverty measurement," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(1), pages 40-62.
    2. Heathcote, Jonathan & Perri, Fabrizio & Violante, Giovanni L, 2009. "Unequal We Stand: An Empirical Analysis of Economic Inequality in the United States, 1967-2006," CEPR Discussion Papers 7538, C.E.P.R. Discussion Papers.
    3. John M. Abowd & Paul A. Lengermann & Kevin L. McKinney, 2002. "The Measurement of Human Capital in the U.S. Economy," Longitudinal Employer-Household Dynamics Technical Papers 2002-09, Center for Economic Studies, U.S. Census Bureau, revised Mar 2003.
    4. Katharine G. Abraham & John C. Haltiwanger & Kristin Sandusky & James Spletzer, 2009. "Exploring Differences in Employment between Household and Establishment Data," NBER Working Papers 14805, National Bureau of Economic Research, Inc.
    5. Emily Isenberg & Liana Christin Landivar & Esther Mezey, 2013. "A Comparison Of Person-Reported Industry To Employer-Reported Industry In Survey And Administrative Data," Working Papers 13-47, Center for Economic Studies, U.S. Census Bureau.
    6. Justin Falk, 2012. "Comparing Wages in the Federal Government and the Private Sector: Working Paper 2012-03," Working Papers 42922, Congressional Budget Office.

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