Reported Income in the NLSY: Consistency Checks and Methods for Cleaning the Data

The National Longitudinal Survey of Youth collects information about over 20 separate components of respondent income. These disaggregated income components provide many opportunities to verify the consistency of the data. This note outlines procedures we have used to identify and `clean’ measurement error in the disaggregated income variables. After cleaning the income data at the disaggregated level, we reconstruct the measure of ‘family income’ and re-evaluate poverty status. While people may not agree with all of our methods, we hope that they will be of some use to other researchers. A second purpose of this note is to highlight the value of the disaggregated data, since without it, it would be impossible to improve on the reported totals. Finally, we hope that with the advent of computerized interviewing technology, checks on the internal consistency of the data of the kind that we propose may eventually be built into interviewing software, thereby improving the quality of the data collected.