U.S. flag

An official website of the United States government

Skip Header


Do Imputed Earnings Earn Their Keep? Evaluating SIPP Earnings and Nonresponse with Administrative Records

Written by:
Working Paper Number SEHSD-WP2016-18, SIPP-WP-275

Abstract

Recent evidence suggests that labor earnings reported in household surveys compare favorably with labor earnings in administrative records. On the other hand, imputed labor earnings in household surveys seem to match labor earnings in administrative records less closely. This tendency has motivated some researchers to exclude imputed earnings observations from wage analyses. However, this strategy might result in sample selection bias if labor earnings are not missing at random. In this paper, we compare reported and imputed labor earnings from the 2008 panel of the Survey of Income and Program Participation to labor earnings from the Social Security Administration’s Detailed Earnings Record. We document that after controlling for observable heterogeneity imputed survey earnings differ from administrative earnings by more than reported survey earnings do on average, although there is considerable heterogeneity across imputation methods in the degree of concordance between survey and administrative data. We illustrate a wave-like pattern of survey earnings nonresponse over the administrative earnings distribution. Finally, we show that differences between survey and administrative earnings can affect coefficient estimates of earnings regressions, depending upon the regressors of interest. On one hand, the estimated returns to self-employment fall 42.3 log points when replacing all survey earnings with administrative earnings and 24.1 log points when replacing only imputed survey earnings with administrative earnings. On the other hand, the corresponding differences are statistically insignificant for estimates of the gender earnings gap.

 



Page Last Revised - October 8, 2021
Is this page helpful?
Thumbs Up Image Yes Thumbs Down Image No
NO THANKS
255 characters maximum 255 characters maximum reached
Thank you for your feedback.
Comments or suggestions?

Top

Back to Header