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U.S. Earnings Mobility: Comparing Survey-Based and Administrative-Based Estimates

  • Lisa M. Dragoset

    (U.S. Census Bureau and Cornell University)

  • Gary S. Fields

    (Cornell University)

Earnings mobility has been studied both at the macro level (how much of a certain kind of mobility is there in the economy?) and at the micro level (what are the correlates of change in income or position?). Many empirical mobility studies provide estimates of the amount of mobility in a country over time and the correlates of individual mobility within the income distribution. While measurement error is recognized as potentially important at both these levels, very little is known about the degree to which earnings mobility estimates are affected by measurement error. In this paper, we use a new dataset that contains individually reported total annual labor earnings from the Survey of Income and Program Participation (SIPP) linked to employer-reported total annual labor earnings from the Social Security Administration’s Detailed Earnings Record (DER; these are taken directly from Box 1 on theW-2 form and are not capped by FICA) to compare micro and macro earnings mobility estimates for the U.S. during the 1990s using the two different earnings measures. We ask how much difference it makes to mobility estimates to use administrative-based earnings rather than survey-based earnings, and we obtain two major findings. Qualitatively, we find that the results are similar but not identical when administrative-based earnings are used rather than survey-based earnings. Quantitatively, we find that magnitudes are often very different when administrative-based earnings are used rather than survey-based earnings. The administrative-based results are neither systematically larger nor systematically smaller than the survey-based ones.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2006-55.pdf
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Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 55.

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Length: 39 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2006-55
Contact details of provider: Web page: http://www.ecineq.org
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  1. Peter Gottschalk & Robert Moffitt, 1994. "The Growth of Earnings Instability in the U.S. Labor Market," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 217-272.
  2. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
  3. Burkhauser, Richard V & Holtz-Eakin, Douglas & Rhody, Stephen E, 1997. "Labor Earnings Mobility and Inequality in the United States and Germany during the Growth Years of the 1980s," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(4), pages 775-94, November.
  4. Moshe Buchinsky & Jennifer Hunt, 1999. "Wage Mobility In The United States," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 351-368, August.
  5. Antman, Francisca & McKenzie, David J., 2005. "Earnings mobility and measurement error : a pseudo-panel approach," Policy Research Working Paper Series 3745, The World Bank.
  6. Bob Baulch & John Hoddinott, 2000. "Economic mobility and poverty dynamics in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 36(6), pages 1-24.
  7. Buchinsky, Mosche & Fields, Gary S & Fougère, Denis & Kramarz, Francis, 2003. "Francs or Ranks? Earnings Mobility in France, 1967-1999," CEPR Discussion Papers 3937, C.E.P.R. Discussion Papers.
  8. Hungerford, Thomas L, 1993. "U.S. Income Mobility in the Seventies and Eighties," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 403-17, December.
  9. Gary Fields & Paul Cichello & Samuel Freije & Marta Menéndez & David Newhouse, 2003. "For Richer or for Poorer? Evidence from Indonesia, South Africa, Spain, and Venezuela," Journal of Economic Inequality, Springer, vol. 1(1), pages 67-99, April.
  10. Pischke, J.S., 1994. "Measurement Error and Earnings Dynamics: Some Estimates from the PSID Validation Study," Working papers 94-01, Massachusetts Institute of Technology (MIT), Department of Economics.
  11. Gary Fields & Paul Cichello & Samuel Freije & Marta Menendez & David Newhouse, 2003. "Household income dynamics: a four-country story," Journal of Development Studies, Taylor & Francis Journals, vol. 40(2), pages 30-54.
  12. John Abowd & Martha Stinson, 2011. "Estimating Measurement Error in SIPP Annual Job Earnings: A Comparison of Census Bureau Survey and SSA Administrative Data," Working Papers 11-20, Center for Economic Studies, U.S. Census Bureau.
  13. Bound, John, et al, 1994. "Evidence on the Validity of Cross-Sectional and Longitudinal Labor Market Data," Journal of Labor Economics, University of Chicago Press, vol. 12(3), pages 345-68, July.
  14. Bigard, A & Guillotin, Y & Lucifora, C, 1998. "Earnings Mobility: An International Comparison of Italy and France," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(4), pages 535-54, December.
  15. Fields, Gary S. & Duval Hernández, Robert & Freije-Rodriguez, Samuel & Sanchez Puerta, Maria Laura, 2007. "Earnings Mobility in Argentina, Mexico, and Venezuela: Testing the Divergence of Earnings and the Symmetry of Mobility Hypotheses," IZA Discussion Papers 3184, Institute for the Study of Labor (IZA).
  16. Fields, Gary S & Ok, Efe A, 1999. "Measuring Movement of Incomes," Economica, London School of Economics and Political Science, vol. 66(264), pages 455-71, November.
  17. Duncan, Greg J & Hill, Daniel H, 1985. "An Investigation of the Extent and Consequences of Measurement Error in Labor-Economic Survey Data," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 508-32, October.
  18. Bound, John & Brown, Charles & Mathiowetz, Nancy, 2001. "Measurement error in survey data," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 59, pages 3705-3843 Elsevier.
  19. Bonggeun Kim & Gary Solon, 2005. "Implications of Mean-Reverting Measurement Error for Longitudinal Studies of Wages and Employment," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 193-196, February.
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