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Match Bias in Wage Gap Estimates Due to Earnings Imputation

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Author Info
Hirsch, Barry T. () (Trinity University and IZA Bonn)
Schumacher, Edward J. (Trinity University)

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Abstract

About 30% of workers in the CPS have earnings imputed. Wage gap estimates are biased toward zero when the attribute being studied (e.g., union status) is not a criterion used to match donors to nonrespondents. An expression for “match bias” is derived in which attenuation equals the sum of match error rates. In practice, attenuation can be approximated by the proportion with imputed earnings. Union wage gap estimates with match bias removed are presented for 1973-2001. Estimates in recent years are biased downward 5 percentage points. Bias in gap estimates accompanying other non-match criteria (public sector, industry, etc.) is examined.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 783.

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Length: 39 pages
Date of creation: May 2003
Date of revision:
Handle: RePEc:iza:izadps:dp783

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Related research
Keywords: wage differentials; hot deck imputation; match bias; CPS; union wage premiums;

Other versions of this item:

Find related papers by JEL classification:
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Microeconomic Data

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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.:
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    Other versions:
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    Other versions:
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    Other versions:
  15. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Blackwell Publishing, vol. 65(2), pages 261-94, April. [Downloadable!] (restricted)
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    Other versions:
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  20. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097 Elsevier. [Downloadable!] (restricted)
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