Publications
Publications
- Journal of Business & Economic Statistics
Earnings Dynamics and Measurement Error in Matched Survey and Administrative Data
By: Dean Hyslop and Wilbur Townsend
Abstract
This article analyzes earnings dynamics and measurement error using a matched longitudinal sample of individuals’ survey and administrative earnings. In line with previous literature, the reported differences are characterized by both persistent and transitory factors. Estimating a model consistent with past results, survey errors are mean-reverting when administrative reports are assumed correct, but not when this assumption is relaxed. Although most reported earnings variation is true, we conclude that measurement errors dominate observed changes, and that transitory earnings contribute little to overall earnings inequality. The results imply the reliability of matched administrative data should be treated with caution.
Keywords
Earnings Dynamics; Measurement Error; Panel Data; Validation Study; Business Earnings; Measurement and Metrics; Forecasting and Prediction
Citation
Hyslop, Dean, and Wilbur Townsend. "Earnings Dynamics and Measurement Error in Matched Survey and Administrative Data." Journal of Business & Economic Statistics 38, no. 2 (2020).