Match Bias in Wage Gap Estimates Due to Earnings Imputation

Barry Hirsch () and Edward J. Schumacher ()
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Edward J. Schumacher: Trinity University

No 783, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: About 30% of workers in the CPS have earnings imputed. Wage gap estimates are biased toward zero when the attribute being studied (e.g., union status) is not a criterion used to match donors to nonrespondents. An expression for “match bias” is derived in which attenuation equals the sum of match error rates. In practice, attenuation can be approximated by the proportion with imputed earnings. Union wage gap estimates with match bias removed are presented for 1973-2001. Estimates in recent years are biased downward 5 percentage points. Bias in gap estimates accompanying other non-match criteria (public sector, industry, etc.) is examined.

Keywords: union wage premiums; wage differentials; CPS; hot deck imputation; match bias (search for similar items in EconPapers)
JEL-codes: C81 J3 J5 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2003-05
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (16)

Published - published in: Journal of Labor Economics, 2004, 22 (3), 689-722

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Journal Article: Match Bias in Wage Gap Estimates Due to Earnings Imputation (2004)
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