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Measuring Labor Earnings Inequality using Public-Use March Current Population Survey Data: The Value of Including Variances and Cell Means When Imputing Topcoded Values

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Richard V. Burkhauser
Shuaizhang Feng
Jeff Larrimore

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Abstract

Using the Census Bureau's internal March Current Population Surveys (CPS) file, we construct and make available variances and cell means for all topcoded income values in the public-use version of these data. We then provide a procedure that allows researchers with access only to the public-use March CPS data to take advantage of this added information when imputing its topcoded income values. As an example of its value we show how our new procedure improves on existing imputation methods in the labor earnings inequality literature.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14458.

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Date of creation: Oct 2008
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Handle: RePEc:nbr:nberwo:14458

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Find related papers by JEL classification:
C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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  1. Thomas Lemieux, 2006. "Increasing Residual Wage Inequality: Composition Effects, Noisy Data, or Rising Demand for Skill?," American Economic Review, American Economic Association, vol. 96(3), pages 461-498, June. [Downloadable!]
  2. Richard V. Burkhauser & Shuaizhang Feng & Stephen P. Jenkins, 2007. "Using the P90/P10 Index to Measure US Inequality Trends with Current Population Survey Data: A View from Inside the Census Bureau Vaults," IZA Discussion Papers 2839, Institute for the Study of Labor (IZA). [Downloadable!]
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  3. Bishop, John A & Chiou, Jong-Rong & Formby, John P, 1994. "Truncation Bias and the Ordinal Evaluation of Income Inequality," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(1), pages 123-27, January.
  4. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-42, June. [Downloadable!] (restricted)
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