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Attrition Bias in Economic Relationships Estimated with Matched CPS Files

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  • David Neumark
  • Daiji Kawaguchi

Abstract

Short panel data sets constructed by matching individuals across monthly files of the Current Population Survey (CPS) have been used to study a wide range of questions in labor economics. Such panels offer unique advantages. But because the CPS makes no effort to follow movers, these panels exhibit significant attrition, which may lead to bias in longitudinal estimates using matched CPS files. Because the Survey of Income and Program Participation (SIPP) uses essentially the same sampling frame and design as the CPS, but makes substantial efforts to follow individuals that move, we use the SIPP to construct 'data-based' rather than 'model-based' corrections for bias from selective attrition. The approach is applied to a couple of standard economic relationships that have been studied with the CPS specifically union wage differentials and the male marriage wage premium. The results for the longitudinal analysis of union wage effects reveal negligible and statistically insignificant evidence of attrition bias. In contrast, the longitudinal analysis of the marriage premium for males finds statistically significant evidence of attrition bias, although the amount of bias does not seem to be serious in an economic sense. We regard the evidence as suggesting that in many applications the advantages of using matched CPS panels to obtain longitudinal estimates are likely to far outweigh the disadvantages from attrition biases, although we should allow for the possibility that attrition bias leads the longitudinal estimates to be understated.

Suggested Citation

  • David Neumark & Daiji Kawaguchi, 2001. "Attrition Bias in Economic Relationships Estimated with Matched CPS Files," NBER Working Papers 8663, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8663 Note: LS
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    Cited by:

    1. Esfandiar Maasoumi & Daniel L. Millimet & Dipanwita Sarkar, 2009. "Who Benefits from Marriage?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 1-33, February.
    2. Junmin Wan, 2004. "Responses of Consumers to the Mandatory Disclosure of Information: Evidence from Natural Experiments in Japanese Inter-brand Cigarette Demands," Discussion Papers in Economics and Business 04-13-Rev, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), revised Feb 2006.
    3. Maasoumi, Esfandiar & Millimet, Daniel & Sarkar, Dipanwita, 2005. "The Distribution of Returns to Marriage," Departmental Working Papers 0503, Southern Methodist University, Department of Economics.
    4. Runjuan Liu & Daniel Trefler, 2008. "Much Ado About Nothing: American Jobs and the Rise of Service Outsourcing to China and India," NBER Working Papers 14061, National Bureau of Economic Research, Inc.
    5. Runjuan Liu & Daniel Trefler, 2011. "A Sorted Tale of Globalization: White Collar Jobs and the Rise of Service Offshoring," NBER Working Papers 17559, National Bureau of Economic Research, Inc.
    6. Jonathan F. Pingle, 2006. "The relocation decisions of working couples," Finance and Economics Discussion Series 2006-33, Board of Governors of the Federal Reserve System (U.S.).

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