Match Bias in Wage Gap Estimates Due to Earnings Imputation

By B. Hirsch, E. J. Schumacher. Journal of Labor Economics, 2004

303 citations recorded by the source corpus.

About 30% of workers in the Current Population Survey 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. Attenuation can be approximated by the proportion with imputed earnings. Union wage gap estimates with match bias removed are presented for 1973–2001. Estimates for recent years are biased downward 5 percentage points. Bias in gap estimates accompanying other non–match criteria (public sector, industry, etc.) is examined.

Subfields: Economics and Econometrics, General Health Professions, Public Administration

View Paper: https://www.semanticscholar.org/paper/c0d972ead870c71ef4b9a612ca769a96d7d75bc9

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

In General Health Professions

In Public Administration

Citations in the corpus

Overwork and the Slow Convergence in the Gender Gap in Wages (2014, methodology): “The JMP decomposition relies on the 1979, 1989, 1999, and 2007 surveys; we chose 2007, rather than 2009, as the end point to estimate effects using data from years with similar macroeconomic conditions.”
Financial literacy and its consequences: Evidence from Russia during the financial crisis (2013, methodology): “15 As an alternative to the imputation and bootstrapping, and based on the analysis of ‘‘match bias’’ during imputation in Hirsch and Schumacher (2004) and Bollinger and Hirsch (2006) for the US Current Population Survey (CPS), we have also conducted the analysis dropping the observations with…”
A Martingale Representation for Matching Estimators (2012, methodology): “This void in the literature has become an object of serious concern in recent years, because the proportion of observations in the CPS with imputed values of weekly earnings has increased steadily: from around 16 percent in 1979, when weekly earnings were included in the monthly survey questionnaire”
Why Do Part-Time Workers Earn Less? The Role of Worker and Job Skills (2005, methodology): “Hirsch and Schumacher (2004) show that there exists bias toward zero (what they term “match bias”) for coefficients on attributes that are not a Census criterion on which earnings donors are matched to nonrespondents.”
Changes Over Time in Union Relative Wage Effects in the UK and the Us Revisited (2002, unknown): “The private sector differentials we report in the second column of Table 4 are smaller than those obtained by Hirsch and Schumacher (2002) in the third column of the table.”
Sensitivity to Missing Data Assumptions: Theory and an Evaluation of the U.S. Wage Structure (2010, background): “Hirsch and Schumacher (2004), for instance, find that nearly 30% of the earnings observations in the Outgoing Rotation Groups of the Current Population Survey (CPS) are imputed.”