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Activity Number: 164
Type: Topic Contributed
Date/Time: Monday, August 1, 2016 : 10:30 AM to 12:20 PM
Sponsor: Survey Research Methods Section
Abstract #320116
Title: Measuring Levels and Trends in Earnings Inequality with Nonresponse, Imputations, and Topcoding
Author(s): Christopher Bollinger*
Companies: University of Kentucky
Keywords: Item Nonresponse ; earnings inequality ; Current Population Survey ; Administrative Data ; Survey nonresponse

Measures of U.S. earnings inequality rely on the Current Population Survey Annual Social and Economic Supplement (ASEC). A substantial and increasing share of individuals surveyed in the CPS either do not participate in the ASEC supplement, or participate but refuse to report earnings and other income. We use ASEC data for calendar years 1997-2010 matched to Social Security Detailed Earnings administrative tax records (DER) to examine the implications of nonresponse for inequality measures. We find evidence that nonresponse is U-shaped with high nonresponse in the left and far right tails of the distribution. Nonresponse bias causes inequality to be understated. Imputations for nonrespondents do not fully correct the bias. Measures of earnings inequality confirm that ASEC inequality measures are lower than measures for the same individuals based on administrative earnings, a gap that has widened somewhat over time. Earnings shares among the top 1% of earners are lower by at least 20 points in the ASEC compared to the DER, with about half accounted for nonresponse and half to topcoding in the ASEC. We examine a variety of hybrid approaches to addressing the issue.

Authors who are presenting talks have a * after their name.

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