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Employment misclassification in survey and administrative reports

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  • Hyslop, Dean R.
  • Townsend, Wilbur

Abstract

This paper analyses measurement error in the classification of employment using matched survey and administrative data from New Zealand. We show that the true employment rate and time-invariant error rates can be identified, given access to two measures of employment with independent errors. Empirical identification requires data with time varying employment rates over at least two periods. We find that both measures have error, with the administrative data being substantially more accurate than the survey data, and false positives are much more likely than false negatives in both sources. Allowing for errors substantially affects estimated employment rates.

Suggested Citation

  • Hyslop, Dean R. & Townsend, Wilbur, 2017. "Employment misclassification in survey and administrative reports," Economics Letters, Elsevier, vol. 155(C), pages 19-23.
    • Handle: RePEc:eee:ecolet:v:155:y:2017:i:c:p:19-23
    DOI: 10.1016/j.econlet.2017.03.013
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    1. Shuaizhang Feng & Yingyao Hu, 2013. "Misclassification Errors and the Underestimation of the US Unemployment Rate," American Economic Review, American Economic Association, vol. 103(2), pages 1054-1070, April.
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    4. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
    5. Dean R. Hyslop & Wilbur Townsend, 2020. "Earnings Dynamics and Measurement Error in Matched Survey and Administrative Data," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 38(2), pages 457-469, April.
    6. Hyslop, Dean R. & Townsend, Wilbur, 2017. "Employment misclassification in survey and administrative reports," Economics Letters, Elsevier, vol. 155(C), pages 19-23.
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    Cited by:

    1. Hyslop, Dean R. & Townsend, Wilbur, 2017. "Employment misclassification in survey and administrative reports," Economics Letters, Elsevier, vol. 155(C), pages 19-23.
    2. Dean Hyslop & Wilbur Townsend, 2017. "The longer term impacts of job displacement on labour market outcomes," Working Papers 17_12, Motu Economic and Public Policy Research.
    3. Ding Liu & Daniel L. Millimet, 2021. "Bounding the joint distribution of disability and employment with misclassification," Health Economics, John Wiley & Sons, Ltd., vol. 30(7), pages 1628-1647, July.

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    More about this item

    Keywords

    Unemployment rate; Measurement error; Validation study;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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