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Seam Bias, Multiple-State, Multiple-Spell Duration Models and the Employment Dynamics of Disadvantaged Women

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  • John C. Ham
  • Xianghong Li
  • Lara Shore-Sheppard

Abstract

Panel surveys generally suffer from “seam bias”--too few transitions observed within reference periods and too many reported between interviews. Seam bias is likely to affect duration models severely since both the start date and the end date of a spell may be misreported. In this paper we examine the employment dynamics of disadvantaged single mothers in the Survey of Income and Program Participation (SIPP) while correcting for seam bias in reported employment status. We develop parametric misreporting models for use in multi-state, multi-spell duration analysis; the models are identified if misreporting parameters are the same for fresh and left-censored spells of the same type. We extend these models to allow misreporting to depend on individual characteristics and for a certain fraction of the sample never to misreport. These extensions are informative about misreporting, but do not affect estimates of the hazard functions. We compare our results to two approaches used previously: i) using only data on the last month of reference periods and ii) adding a dummy variable for the last month of the reference periods. We find that there are important differences between our estimates and those obtained from ii), and very important differences between our estimates and those obtained from i). Finally, we also consider three alternative models of misreporting and are able to reject them based on aggregates of our micro data.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15151.

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Date of creation: Jul 2009
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Handle: RePEc:nbr:nberwo:15151

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Cited by:
  1. Rothstein, Jesse & Valletta, Robert G., 2014. "Scraping by: Income and program participation after the loss of extended unemployment benefits," Working Paper Series 2014-6, Federal Reserve Bank of San Francisco.
  2. Purvi Sevak & Lucie Schmidt, 2007. "How do Immigrants Fare in Retirement?," Working Papers wp169, University of Michigan, Michigan Retirement Research Center.
  3. Meta Brown & Christopher J. Flinn & Andrew Schotter, 2009. "Real-time search in the laboratory and the market," Staff Reports 410, Federal Reserve Bank of New York.
  4. Carol Osler & Thang Nguyen & Tanseli Savaser, 2011. "Asymmetric Information and the Foreign-Exchange Trades of Global Custody Banks," Department of Economics Working Papers 2011-09, Department of Economics, Williams College.
  5. Zhuan Pei, 2013. "Eligibility Recertification and Dynamic Opt-in Incentives in Income-tested Social Programs: Evidence from Medicaid/CHIP," Working Papers 61, Brandeis University, Department of Economics and International Businesss School.

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