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Revisiting the shape of earnings nonresponse

Author

Listed:
  • Klee, Mark A.
  • Chenevert, Rebecca L.
  • Wilkin, Kelly R.

Abstract

Previous research shows a “U-shaped” relationship between earnings and survey earnings nonresponse. We demonstrate that this pattern depends upon the treatment of individuals who worked according to tax data but lack work in surveys. Including these individuals reveals a wave of earnings nonresponse that is increasing in the tails and decreasing for middle earnings quantiles. We illustrate that individuals with positive earnings in tax data yet survey reports of nonemployment lie disproportionately at the bottom of the earnings distribution, bending down the left tail of the traditional “U-shaped” earnings nonresponse pattern. The reporting behavior of survey nonworkers can have important implications for evaluating inequality estimates based on survey data.

Suggested Citation

  • Klee, Mark A. & Chenevert, Rebecca L. & Wilkin, Kelly R., 2019. "Revisiting the shape of earnings nonresponse," Economics Letters, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:ecolet:v:184:y:2019:i:c:s0165176519303313
    DOI: 10.1016/j.econlet.2019.108663
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    References listed on IDEAS

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    1. Lillard, Lee & Smith, James P & Welch, Finis, 1986. "What Do We Really Know about Wages? The Importance of Nonreporting and Census Imputation," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 489-506, June.
    2. Patrick Kline & Andres Santos, 2013. "Sensitivity to missing data assumptions: Theory and an evaluation of the U.S. wage structure," Quantitative Economics, Econometric Society, vol. 4(2), pages 231-267, July.
    3. Christopher R. Bollinger & Barry T. Hirsch & Charles M. Hokayem & James P. Ziliak, 2019. "Trouble in the Tails? What We Know about Earnings Nonresponse 30 Years after Lillard, Smith, and Welch," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2143-2185.
    4. Charles Hokayem & Christopher Bollinger & James P. Ziliak, 2015. "The Role of CPS Nonresponse in the Measurement of Poverty," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 110(511), pages 935-945, September.
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    More about this item

    Keywords

    Administrative data; Survey data quality; Earnings; Nonresponse;
    All these keywords.

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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