Is Earnings Nonresponse Ignorable?
AbstractEarnings nonresponse in the Current Population Survey is roughly 30% in the monthly surveys and 20% in the annual March survey. Even if nonresponse is random, severe bias attaches to wage equation coefficient estimates on attributes not matched in the earnings imputation hot deck. If nonresponse is ignorable, unbiased estimates can be achieved by omitting imputed earners, yet little is known about whether or not CPS nonresponse is ignorable. Using sample frame measures to identify selection, we find clear-cut evidence among men but limited evidence among women for negative selection into response. Wage equation slope coefficients are affected little by selection but because of intercept shifts, wages for men and to a lesser extent women are understated, as are gender wage gaps. Selection is less severe among household heads/co-heads than among other household members.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5347.
Length: 23 pages
Date of creation: Nov 2010
Date of revision:
Publication status: published in: Review of Economics and Statistics, 2013, 95 (2), 407-416
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Other versions of this item:
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-LAB-2010-12-18 (Labour Economics)
- NEP-MIC-2010-12-18 (Microeconomics)
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