Item Non-response and Imputation of Annual Labor Income in Panel Surveys from a Cross-National Perspective
Using data on annual individual labor income from three representative panel datasets (German SOEP, British BHPS, Australian HILDA) we investigate a) the selectivity of item non-response (INR) and b) the impact of imputation as a prominent post-survey means to cope with this type of measurement error on prototypical analyses (earnings inequality, mobility and wage regressions) in a cross-national setting. Given the considerable variation of INR across surveys as well as the varying degree of selectivity build into the missing process, there is substantive and methodological interest in an improved harmonization of (income) data production as well as of imputation strategies across surveys. All three panels make use of longitudinal information in their respective imputation procedures, however, there are marked differences in the implementation. Firstly, although the probability of INR is quantitatively similar across countries, our empirical investigation identifies cross-country differences with respect to the factors driving INR: survey-related aspects as well as indicators accounting for variability and complexity of labor income composition appear to be relevant. Secondly, longitudinal analyses yield a positive correlation of INR on labor income data over time and provide evidence of INR being a pre-dictor of subsequent unit-non-response, thus supporting the "cooperation continuum" hy-pothesis in all three panels. Thirdly, applying various mobility indicators there is a robust picture about earnings mobility being significantly understated using information from completely observed cases only. Finally, regression results for wage equations based on observed ("complete case analysis") vs. all cases and controlling for imputation status, indicate that individuals with imputed incomes, ceteris paribus, earn significantly above average in SOEP and HILDA, while this relationship is negative using BHPS data. However, once applying the very same imputation procedure used for HILDA and SOEP, namely the "row-and-column-imputation" approach suggested by Little & Su (1989), also to BHPS-data, this result is reversed, i.e., individuals in the BHPS whose income has been imputed earn above average as well. In our view, the reduction in cross-national variation resulting from sensitivity to the choice of imputation approaches underscores the importance of investing more in the improved cross-national harmonization of imputation techniques.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
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.:
- Riphahn, Regina T. & Serfling, Oliver, 2002.
"Item Non-Response on Income and Wealth Questions,"
IZA Discussion Papers
573, Institute for the Study of Labor (IZA).
- Susanne Rässler & Regina Riphahn, 2006. "Survey item nonresponse and its treatment," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 90(1), pages 217-232, March.
- Cheti Nicoletti & Franco Peracchi, 2006. "The effects of income imputation on microanalyses: evidence from the European Community Household Panel," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(3), pages 625-646.
- Denise Hawkes & Ian Plewis, 2006. "Modelling non-response in the National Child Development Study," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(3), pages 479-491.
- Little, Roderick J A, 1988. "Missing-Data Adjustments in Large Surveys," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(3), pages 287-96, July.
- Daniel H. Hill & Robert J. Willis, 2001. "Reducing Panel Attrition: A Search for Effective Policy Instruments," Journal of Human Resources, University of Wisconsin Press, vol. 36(3), pages 416-438.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007.
"The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements,"
Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften,
Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp736. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If references are entirely missing, you can add them using this form.