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Article type: Research Article
Authors: Bricker, Jessea; * | Engelhardt, Gary V.a
Affiliations: [a] Department of Economics and Center for Policy Research, Maxwell School of Citizenship and Public Affairs, 426 Eggers Hall, Syracuse University, Syracuse, NY 13244, USA
Correspondence: [*] Corresponding author. Tel.: +1 315 443 3114; Fax: +1 315 443 1081; E-mail: [email protected]
Abstract: This paper provides new evidence on the extent of measurement error in respondent-reported earnings data by exploiting detailed W-2 records matched to older workers in the Health and Retirement Study (HRS). There is a negative correlation between the measurement error and the true value of earnings as measured by the W-2 records, which indicates the presence of non-classical measurement error. Yet for men and women, this error shows little correlation with a standard set of cross-sectional earnings determinants. Quantitatively, the bias from using self-reported earnings, either as a dependent or explanatory variable, is larger than those from existing studies of the CPS and PSID.
Keywords: Measurement error, earnings
DOI: 10.3233/JEM-2008-0297
Journal: Journal of Economic and Social Measurement, vol. 33, no. 1, pp. 39-61, 2008
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