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Characterizing Measurement Error in the German Socio-Economic Panel Using Linked Survey and Administrative Data

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  • Nico Thurow

Abstract

This paper exploits the linkage of German administrative social security data (GER: Integrierte Erwerbsbiografien) and survey data from the socio-economic panel (GER: Sozio-\"okonomisches Panel, SOEP) for the characterization of measurement error in metrics quantifying individual-specific labor earnings in Germany. We find that survey participants' decision whether to consent to linkage is non-random based on observables. In that sense, the studied sample does not constitute a random sample of SOEP. Measurement error is not classical: we observe underreporting of income on average, autocorrelation, and non-zero correlation with the true signal and other observable characteristics. In levels, calculated reliability ratios above 0.94 hint at a relaitvely small attenuation bias in simple linear univariate regressions with earnings as the explanatory variable. For changes in income, i.e. first differences, the bias from measurement error is exacerbated.

Suggested Citation

  • Nico Thurow, 2025. "Characterizing Measurement Error in the German Socio-Economic Panel Using Linked Survey and Administrative Data," Papers 2501.03015, arXiv.org.
  • Handle: RePEc:arx:papers:2501.03015
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