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Match Bias in Wage Gap Estimates Due to Earnings Imputation

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Listed:
  • Hirsch, Barry

    (Georgia State University)

  • Schumacher, Edward J.

    (Trinity University)

Abstract

About 30% of workers in the CPS have earnings imputed. Wage gap estimates are biased toward zero when the attribute being studied (e.g., union status) is not a criterion used to match donors to nonrespondents. An expression for “match bias” is derived in which attenuation equals the sum of match error rates. In practice, attenuation can be approximated by the proportion with imputed earnings. Union wage gap estimates with match bias removed are presented for 1973-2001. Estimates in recent years are biased downward 5 percentage points. Bias in gap estimates accompanying other non-match criteria (public sector, industry, etc.) is examined.

Suggested Citation

  • Hirsch, Barry & Schumacher, Edward J., 2003. "Match Bias in Wage Gap Estimates Due to Earnings Imputation," IZA Discussion Papers 783, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp783
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    More about this item

    Keywords

    union wage premiums; wage differentials; CPS; hot deck imputation; match bias;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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