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Attrition Bias in Economic Relationships Estimated with Matched CPS Files

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Author Info
David Neumark
Daiji Kawaguchi

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Abstract

Short panel data sets constructed by matching individuals across monthly files of the Current Population Survey (CPS) have been used to study a wide range of questions in labor economics. Such panels offer unique advantages. But because the CPS makes no effort to follow movers, these panels exhibit significant attrition, which may lead to bias in longitudinal estimates using matched CPS files. Because the Survey of Income and Program Participation (SIPP) uses essentially the same sampling frame and design as the CPS, but makes substantial efforts to follow individuals that move, we use the SIPP to construct 'data-based' rather than 'model-based' corrections for bias from selective attrition. The approach is applied to a couple of standard economic relationships that have been studied with the CPS specifically union wage differentials and the male marriage wage premium. The results for the longitudinal analysis of union wage effects reveal negligible and statistically insignificant evidence of attrition bias. In contrast, the longitudinal analysis of the marriage premium for males finds statistically significant evidence of attrition bias, although the amount of bias does not seem to be serious in an economic sense. We regard the evidence as suggesting that in many applications the advantages of using matched CPS panels to obtain longitudinal estimates are likely to far outweigh the disadvantages from attrition biases, although we should allow for the possibility that attrition bias leads the longitudinal estimates to be understated.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8663.

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Date of creation: Dec 2001
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Handle: RePEc:nbr:nberwo:8663

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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. David Neumark & William Wascher, 1995. "The Effects of Minimum Wages on Teenage Employment and Enrollment: Evidence from Matched CPS Surveys," NBER Working Papers 5092, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July. [Downloadable!] (restricted)
  3. Sean Becketti & William Gould & Lee Lillard & Finis Welch, 1985. "The Panel Study of Income Dynamics After Fourteen Years: An Evaluation," UCLA Economics Working Papers 361, UCLA Department of Economics. [Downloadable!]
  4. David Neumark & Sanders D. Korenman, 1988. "Does marriage really make men more productive?," Finance and Economics Discussion Series 29, Board of Governors of the Federal Reserve System (U.S.).
  5. David Neumark & Scott Adams, 2000. "Do Living Wage Ordinances Reduce Urban Poverty?," NBER Working Papers 7606, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. Peracchi, Franco & Welch, Finis, 1995. "How representative are matched cross-sections? Evidence from the Current Population Survey," Journal of Econometrics, Elsevier, vol. 68(1), pages 153-179, July. [Downloadable!] (restricted)
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  7. David Neumark & Mark Schweitzer & William Wascher, 1998. "The Effects of Minimum Wages on the Distribution of Family Incomes: A Non-Parametric Analysis," NBER Working Papers 6536, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Becketti, Sean, et al, 1988. "The Panel Study of Income Dynamics after Fourteen Years: An Evaluatio n," Journal of Labor Economics, University of Chicago Press, vol. 6(4), pages 472-92, October. [Downloadable!] (restricted)
  9. Daniel, K., 1991. "Does Marriage Make Men More Productive?," University of Chicago - Economics Research Center 92-2, Chicago - Economics Research Center.
  10. Brigitte C. Madrian & Lars John Lefgren, 1999. "A Note on Longitudinally Matching Current Population Survey (CPS) Respondents," NBER Technical Working Papers 0247, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Jakubson, George, 1991. "Estimation and Testing of the Union Wage Effect Using Panel Data," Review of Economic Studies, Blackwell Publishing, vol. 58(5), pages 971-91, October. [Downloadable!] (restricted)
  12. Olsen, Randall J, 1980. "A Least Squares Correction for Selectivity Bias," Econometrica, Econometric Society, vol. 48(7), pages 1815-20, November. [Downloadable!] (restricted)
  13. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  14. Freeman, Richard B, 1984. "Longitudinal Analyses of the Effects of Trade Unions," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 1-26, January. [Downloadable!] (restricted)
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  15. Linda Goldberg & Joseph Tracy & Stephanie Aaronson, 1999. "Exchange Rates and Employment Instability: Evidence from Matched CPS Data," American Economic Review, American Economic Association, vol. 89(2), pages 204-210, May. [Downloadable!] (restricted)
  16. Macpherson, David A & Hirsch, Barry T, 1995. "Wages and Gender Composition: Why Do Women's Jobs Pay Less?," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 426-71, July. [Downloadable!] (restricted)
  17. Finis Welch, 1993. "Matching the Current Population Surveys," Stata Technical Bulletin, StataCorp LP, vol. 2(12). [Downloadable!]
  18. Chun, Hyunbae & Lee, Injae, 2001. "Why Do Married Men Earn More: Productivity or Marriage Selection?," Economic Inquiry, Oxford University Press, vol. 39(2), pages 307-19, April.
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  1. Junmin Wan, 2004. "Responses of Consumers to the Mandatory Disclosure of Information: Evidence from Natural Experiments in Japanese Inter-brand Cigarette Demands," Discussion Papers in Economics and Business 04-13-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Feb 2006. [Downloadable!]
  2. Runjuan Liu & Daniel Trefler, 2008. "Much Ado About Nothing: American Jobs and the Rise of Service Outsourcing to China and India," NBER Working Papers 14061, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Jonathan F. Pingle, 2006. "The relocation decisions of working couples," Finance and Economics Discussion Series 2006-33, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  4. Esfandiar Maasoumi & Daniel L. Millimet & Dipanwita Sarkar, 2008. "Who Benefits from Marriage?," Emory Economics 0807, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  5. Maasoumi, Esfandiar & Millimet, Daniel & Sarkar, Dipanwita, 2005. "The Distribution of Returns to Marriage," Departmental Working Papers 0503, Southern Methodist University, Department of Economics. [Downloadable!]
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