Using Administrative Earnings Records to Assess Wage Data Quality in the March Current Population Survey and the Survey of Income and Program Participation
November 2002
Working Paper Number:
tp-2002-22
Abstract
The March Current Population Survey (CPS) and the Survey of Income and Program
Participation (SIPP) produce different aggregates and distributions of annual wages. An excess of
high wages and shortage of low wages occurs in the March CPS. SIPP shows the opposite, an
excess of low wages and shortage of high wages. Exactly-matched Detailed Earnings Records
(DER) from the Social Security Administration allow comparing March CPS and SIPP people's
wages using data independent of the surveys. Findings include the following. March CPS and
SIPP people differ little in their true wage characteristics. March CPS and SIPP represent a
worker's percentile rank better than the dollar amount of wages. Workers with one job and low
work effort have underestimated March CPS wages. March CPS has a higher level of
"underground" wages than SIPP, and increasingly so in the 1990s. March CPS has a higher level
of self-employment income "misclassified" as wages than SIPP, and increasingly so in the 1990s.
These trends may explain one-third of March CPS's 6-percentage-point increase in aggregate
wages relative to independent estimates from 1993 to 1995. Finally, the paper delineates March
CPS occupations disproportionately likely to be absent from the administrative data entirely or to
"misclassify" self-employment income as wages.
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:
statistical,
survey,
respondent,
earnings,
employ,
employed,
yearly,
discrepancy,
salary,
percentile,
population,
labor statistics,
wage data,
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earn,
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:
Bureau of Labor Statistics,
Social Security Administration,
Current Population Survey,
Employer Identification Numbers,
Survey of Income and Program Participation,
Social Security,
Social Security Number,
LEHD Program,
Detailed Earnings Records
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