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Modeling Earnings Measurement Error: A Multiple Imputation Approach

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  • Brownstone, David
  • Valletta, Robert G

Abstract

Recent survey validation studies suggest that measurement error in earnings data is pervasive and violates classical measurement error assumptions and, therefore, may bias estimation of cross-section and longitudinal earnings models. The authors model the structure of earnings measurement error using data from the Panel Study of Income Dynamics Validation Study (PSIDVS). They then use Donald B. Rubin's (1987) multiple imputation techniques to estimate consistent earnings equations under nonclassical earnings measurement error in the PSID. The authors' technique is readily generalized and the empirical results demonstrate the potential importance of correcting for measurement error in earnings and related data, particularly during recessions. Copyright 1996 by MIT Press.

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  • Brownstone, David & Valletta, Robert G, 1996. "Modeling Earnings Measurement Error: A Multiple Imputation Approach," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 705-717, November.
  • Handle: RePEc:tpr:restat:v:78:y:1996:i:4:p:705-17
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    Cited by:

    1. Rodolphe Desbordes & Gary Koop, 2014. "The Known Unknowns of Governance," Working Paper series 38_14, Rimini Centre for Economic Analysis.
    2. Jörg-Peter Schräpler, 2002. "Respondent Behavior in Panel Studies: A Case Study for Income-Nonresponse by Means of the German Socio-Economic Panel (GSOEP)," Discussion Papers of DIW Berlin 299, DIW Berlin, German Institute for Economic Research.
    3. Shore-Sheppard, Lara & Buchmueller, Thomas C. & Jensen, Gail A., 2000. "Medicaid and crowding out of private insurance: a re-examination using firm level data," Journal of Health Economics, Elsevier, vol. 19(1), pages 61-91, January.
    4. Javier Escobal & Sonia Laszlo, 2008. "Measurement Error in Access to Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(2), pages 209-243, April.
    5. David Brownstone & Robert Valletta, 2001. "The Bootstrap and Multiple Imputations: Harnessing Increased Computing Power for Improved Statistical Tests," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 129-141, Fall.
    6. Schrapler, Jorg-Peter, 2003. "Respondent behaviour in panel studies: a case study for income-nonresponse by means of the British Household Panel Study (BHPS)," ISER Working Paper Series 2003-08, Institute for Social and Economic Research.
    7. repec:dau:papers:123456789/4924 is not listed on IDEAS
    8. Fernández-Kranz, Daniel & Lacuesta, Aitor & Rodríguez-Planas, Núria, 2010. "Chutes and Ladders: Dual Tracks and the Motherhood Dip," IZA Discussion Papers 5403, Institute for the Study of Labor (IZA).
    9. Florence Arestoff, 2000. "Taux de rendement de l’éducation sur le marché du travail d’un pays en développement Un réexamen du modèle de gains de Mincer," Working Papers DT/2000/11, DIAL (Développement, Institutions et Mondialisation).
    10. Nikolas Mittag, 2013. "A Method Of Correcting For Misreporting Applied To The Food Stamp Program," Working Papers 13-28, Center for Economic Studies, U.S. Census Bureau.
    11. Suziedelyte, Agne & Johar, Meliyanni, 2013. "Can you trust survey responses? Evidence using objective health measures," Economics Letters, Elsevier, vol. 121(2), pages 163-166.
    12. Gabriele Durrant, 2006. "Missing data methods in official statistics in the United Kingdom: Some recent developments," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(4), pages 577-593, December.
    13. Keisuke Hirano & Guido W. Imbens & Geert Ridder & Donald B. Rubin, 2001. "Combining Panel Data Sets with Attrition and Refreshment Samples," Econometrica, Econometric Society, vol. 69(6), pages 1645-1659, November.
    14. Klevmarken, N. Anders, 2005. "Estimates of a labour supply function using alternative measures of hours of work," European Economic Review, Elsevier, vol. 49(1), pages 55-73, January.
    15. Marsh, L.C.Lawrence C., 2004. "The econometrics of higher education: editor's view," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 1-18.
    16. Donal O'Neill, 2015. "Correcting for Self-Reporting Bias in BMI: A Multiple Imputation Approach," Economics, Finance and Accounting Department Working Paper Series n263-15.pdf, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
    17. Erik Meijer & Lynn A. Karoly & Pierre-Carl Michaud, 2010. "Using Matched Survey and Administrative Data to Estimate Eligibility for the Medicare Part D Low Income Subsidy Program," Working Papers WR-743, RAND Corporation.
    18. Rehkopf, David H. & Jencks, Christopher & Glymour, M. Maria, 2010. "The association of earnings with health in middle age: Do self-reported earnings for the previous year tell the whole story?," Social Science & Medicine, Elsevier, vol. 71(3), pages 431-439, August.
    19. Donal O’Neill & Olive Sweetman, 2013. "The consequences of measurement error when estimating the impact of obesity on income," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-20, December.
    20. Mauro Mastrogiacomo, 2010. "Testing Consumers' Asymmetric Perception Of Changes In Household Financial Situation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(2), pages 327-350, June.
    21. Emre Ekinci, 2009. "Dealing with Attrition When Refreshment Samples are Available: An Application to the Turkish Household Labor Force Survey," 2009 Meeting Papers 353, Society for Economic Dynamics.
    22. Brownstone, David, 1997. "Multiple Imputation Methodology for Missing Data, Non-Random Response, and Panel Attrition," University of California Transportation Center, Working Papers qt2zd6w6hh, University of California Transportation Center.
    23. Stinebrickner, Ralph & Stinebrickner, T.R.Todd R., 2004. "Time-use and college outcomes," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 243-269.

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