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On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages

Author

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  • Caliendo, Marco

    (University of Potsdam)

  • Huber, Katrin

    (University of Potsdam)

  • Isphording, Ingo

    (Max Planck Institute for Behavioral Economics)

  • Wegmann, Jakob

    (Rockwool Foundation Berlin)

Abstract

We study the extent, correlates, and consequences of reporting bias in survey wages using German linked survey-administrative data (SOEP-CMI-ADIAB). Survey wages differ systematically from administrative records: mean survey wages are 7% lower, with mean-reverting discrepancies that firm context explains far better than individual characteristics. Since neither source alone is sufficient, we construct a hybrid wage combining their strengths. Measurement choice matters mainly through the treatment of administrative top-coding: when wages are outcomes, censoring at the assessment limit understates returns to education by 4-11% and the gender wage gap by up to 23%, while imputation reverses the bias for returns. When wages are regressors, wage-satisfaction gradients are 9-28% steeper with survey than administrative wages below the assessment limit, indicating non-classical, context-dependent misreporting. We provide guidance for choosing between administrative, survey, and hybrid wages, with lessons for any setting where self-reported wages are collected alongside top-coded administrative records.

Suggested Citation

  • Caliendo, Marco & Huber, Katrin & Isphording, Ingo & Wegmann, Jakob, 2026. "On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages," IZA Discussion Papers 18794, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18794
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    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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