Transcript How Good Are ASEC Earnings Data? A Comparison to SSA

How Good Are ASEC Earnings Data?
A Comparison to SSA Detailed
Earning Records.
Joan Turek, Kendall Swenson and Bula Ghose, Department of
Health and Human Services
Fritz Scheuren and Daniel Lee, NORC University of Chicago
The views are those expressed by the authors and are not the
official position of any of their organizations
Acknowledgements
The authors thank Charles T. Nelson,
Assistant Division Chief for Economic
Characteristics, and Edward J. Welniak Jr.,
Chief of the Income Statistics Branch, Bureau
of the Census, for their extensive assistance
in developing the comprehensive data series,
including the matched data and for
reviewing our findings
2
Research on Effects of Imputation
Past research looking at imputation
on the Current Population Survey
(CPS), Annual Social and Economic
Supplement (ASEC) has focused on:
-Trends
-Poverty
-Demographics
3
Current Focus: Match of ASEC/DER
-Joint project by Office of the Assistant
Secretary for Planning and Evaluation,
Department of Health and Human
Services and Census Bureau
-Project matches the 2006 ASEC to
Social Security’s 2005 Detailed
Earnings Records (DER)
-Thus, 2005 CY Income
4
Handling CPS Nonresponse
• Imputation occurs at the person level
by income source
• Assigns amount from reporters with
similar characteristics
• ASEC uses “Hot Deck” procedures
• Imputation method consistent over
time
5
Income Imputation
• Item impute: sample persons or
other household member fails to
respond to a specific question.
Responses to more than one item
may be imputed.
• Whole impute: entire supplement is
imputed using the monthly survey
6
Income Imputation (Cont)
• Item imputes use information from
the “basic” monthly survey and the
ASEC supplement
• Limited information on the basic
monthly survey --- have labor force
experience for the reference week
and not last year
7
Trends in Imputation
• Imputation rates for total dollar income
began trending upward after 1988 when the
CPS went from 12 to 55 income questions
• Imputation rates rose from 21.2% in 1977 to
35.0% in 2010
• Item imputes have more than doubled since
1987
• Whole imputes have remained fairly stable
over this period (1987 to 2010).
8
Percent of Total Dollar Income Imputed for Persons
with Positive Income by Year
40%
35.0%
35%
30%
25%
20%
21.2%
15%
10%
5%
0%
1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
9
Percent of Total Dollar Income for Persons with
Positive Income by Imputation Type and Year
40%
35%
30%
Item Imputes
25%
21.8%
20%
15%
10.5%
11.3%
10%
9.2%
Whole Imputes
5%
0%
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
10
Trends in Poverty
• The poverty rates (number of persons in poverty)
trend lines for item, whole and no imputes are
generally parallel over time, increasing and
decreasing with similarity across the years (1987
to 2010
• Poverty rates in any single year differ by
imputation status. Persons with no imputes have
the highest poverty rate, those with whole
imputes are next and those with item imputes
have the lowest poverty rate
11
Percent of Persons with Positive Income that are Poor
by Type of Imputation and Year
14%
12%
No Impute
11.7%
10.5%
10%
9.7%
9.8%
8%
6%
Whole Impute
7.2%
6.7%
Item Impute
4%
2%
0%
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
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Impact of Imputation on Poverty Rates for Persons
with Positive Income in 2005 (Counterfactual)
% Poor
All Persons with Positive Income
8.59%
No Imputes
10.07%
Item Imputes
6.48%
Whole Imputes
9.14%
Whole Imputes Plus No Imputes
9.91%
Item Imputes Plus No Imputes
8.53%
All Persons with Item Impute Values Set to Zero
25.60%
Item Imputes Only Set to Zero
48.66%
13
The 2005 Calendar Year Census Match Project
• Earnings 82% of ASEC income in 2005
• Results are presented for all persons 15 and
older with earnings who matched i.e. - 84.7%
of ASEC person records
• Results are also presented for persons in
poverty ---DER earnings substituted for ASEC
earnings and poverty recomputed. (At least 1
DER matched person in family) – 82% of
poverty population (unit counts)
14
Comparing DER and ASEC
• The definition of earnings used in matching the
2005 DER to the 2006 ASEC is:
– For The DER: max(Box1Comp+Deferred,
Box3Wages) + max(Medicare_SE, FICA_SE)
– For the ASEC: PEARNVAL
– Since 1978 DER developed fromW2 tax data
• DER is not a gold standard
– Reports SSA covered wages well, but misses
some persons and some sources of earnings
15
How they Differ
• Coverage
– Employers may pay some wages underground and employees in many
service industries do not report all of their wages to Social Security, but
they may be is ASEC
– Major groups not covered in the DER include civilian federal employees
hired before January 1, 1984; railroad workers, certain employees of state
and local governments who are covered under their employer’s
retirement system; domestic and farm workers whose earnings do not
meet certain minimum requirements and persons with very low earnings
from self employment. Some of these jobs are covered under Medicare
– Individuals might report different allocations of wage and salary and selfemployment earnings from S Corporations and the DER and ASEC
Amy Olsen and Russell Hudson, Social Security Administration’s Master Earnings File: Background
Information, SS Bulletin, vol.68, No. 3, 2009, page 41, Footnote 6
16
How they Differ (continued)
• What’s Excluded
– DER does not include health insurance premiums that are not taxed under
Social Security, Medicare or the Federal Income tax not included in Boxes
1,3,or 5 of the W-2
– Health Savings Account (HSA) exempted compensation is in W-2 Box 12. It is
not possible to determine from the W-2 alone or from the MEF how much of
HSA shown in W-2 Box 12 is already included in W-2 Boxes 1, 3, or 5 (per IRS
consultation). Therefore, if you add HSA to total earnings, as we have chosen
to do, you will possibly be overstating the total earnings. If you choose to not
add the HSA to total earnings, you will possibly be understating the total
earnings. It depends on the sample of workers you are looking at and how
common HSA is. Generally speaking, the impact of HSA should be slight
- The same issue may be true regarding 457(b) deferred compensation plans.
It is not possible to determine from the W-2 alone or from the Master
Earnings File how much of that amount in Box 12 is already included in W-2
Boxes 3 and 5 (per IRS consultation)
W2 can be updated at any time and so some changes are missed
Greg Diez, Social Security Administration, several e-mails.
17
Implications
If their employers allow, employees can deduct all of the following pre-tax in addition to their
401(k) contributions which the DER will give you:
Up to $5,000 for dependent care
Up to $5,000 for flexible spending for health care
The cost of their portion of health insurance premiums (this could be in the $5,000 to
$10,000 range)
Commuting costs which could run in excess of $3000 for people using the maximum.
There’s probably an inverse relationship between dependent care and flex spending: large
flex spending deductions tend to come after children are past the need for dependent care.
But health insurance premiums will tend to be independent.
The important thing is that these are not defined as proportions of salary the way flex
spending is. For a family with $50,000 in income, you could be talking 10 to 20 percent easily.
Health insurance premiums alone could be that much. A family with $100,000 in income
might be more likely, though, to incur deductible expenses, so the fraction not reported on
the W-2 might not decline a whole lot.
John Czajka, Mathematica Policy Research, stated in an e-mail on April 3, 2012
18
Presentation of Results: All Persons 15
and Older with Earnings
• Tabulations were constructed crossing ASEC
earnings with DER earnings at $10,000
intervals in order to meet disclosure
provisions
• This detailed information collapsed into easier
to examine format providing information on
how closely results matched—e.g. deviations
from same results (within $10,000 of each
other)
19
CPS-ASEC
Reported
Earnings
Matched DERS Earnings
$1 to
$9999
$10,000
to
$19,999
$20,000
to
$29,999
$30,000
to
$39,999
$40,000
to
$49,999
$50,000
to
$59,999
$60,000
to
$69,999
$70,000
to
$79,999
$80,000
to
$89,999
$90,000
to
$99,999
$100,000
or more
$1 to $999
Same
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
$10,000 to
$19,999
+1
Same
-1
-2
-3
-4
-5
-6
-7
-8
-9
Sum
-10
$20,000 to
$29,999
+2
+1
Same
-1
-2
-3
-4
-5
-6
-7
-8
Sum
-9
$30,000 to
$39,999
+3
+2
+1
Same
-1
-2
-3
-4
-5
-6
-7
Sum
-8
$40,000 to
$49,999
+4
+3
+2
+1
Same
-1
-2
-3
-4
-5
-6
Sum
-7
$50,000 to
$59,999
+5
+4
+3
+2
+1
Same
-1
-2
-3
-4
-5
Sum
-6
$60,000 to
$69,999
+6
+5
+4
+3
+2
+1
Same
-1
-2
-3
-4
Sum
-5
$70,000 to
$79,999
+7
+6
+5
+4
+3
+2
+1
Same
-1
-2
-3
Sum
-4
$80,000 to
$89,999
+8
+7
+6
+5
+4
+3
+2
+1
Same
-1
-2
Sum
-3
$90,000 to
$99,999
+9
+8
+7
+6
+5
+4
+3
+2
+1
Same
-1
Sum
-2
$100,000
or more
+10
+9
+8
+7
+6
+5
+4
+3
+2
+1
Same
Sum
-1
Sum
+10
Sum
+9
Sum
+8
Sum
+7
Sum
+6
Sum
+5
Sum
+4
Sum
+3
Sum
+2
Sum
+1
Sum
Same
Sum of
Diagonals
Sum of
Diagonals
20
The Population with Earnings who
Matched
• 52% of all persons 15+ with earnings are
within $10,000 of each other—79% are
within plus or minus $20,000 of each
other
• Reporters (no imputes) do best with 61%
of those with earnings within $10,000 of
each other—88% within plus or minus
$20,000
21
The Population with Earnings who
Matched (continued)
• More persons with item imputes were within
$10,000 of each other, 28%, than those with
whole imputes, 24%
• 73% and 72% respectively were within plus or
minus $20,000
22
Distribution of ASEC and DER Earning Class Differences in 2005
(All)
70%
60%
52%
50%
40%
30%
ASEC < DER
ASEC > DER
16%
20%
11%
10%
6%
4%
1% 1% 2%
3% 1% 1%
1%
+10
+9
+8
+7
+6
+5
+4
+3
+2
+1
Same
-1
-2
-3
-4
-5
-6
-7
-8
-9
0%
$10,000 Class Categories
23
Distribution of ASEC and DER Earning Class Differences in 2005
(No Imputes)
70%
61%
60%
50%
40%
ASEC < DER
ASEC > DER
17%
20%
10%
+10
+9
+8
+7
+6
+2
+1
Same
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
0%
2% 1% 1%
+5
4%
1% 2%
+4
10%
+3
30%
$10,000 Class Categories
24
Distribution of ASEC and DER Earning Class Differences in 2005
(Item Imputes)
70%
60%
50%
40%
28%
30%
ASEC < DER
ASEC > DER
16%
+10
+9
+8
+7
+6
3% 2% 1%
1% 1% 1%
+5
5%
+4
+1
Same
-1
-3
-4
-5
-6
-8
-9
-10
0%
-7
4%
1% 1% 2% 3%
9%
7%
-2
10%
+3
13%
+2
20%
$10,000 Class Categories
25
Distribution of ASEC and DER Earning Class Differences in 2005
(Whole Imputes)
70%
60%
50%
40%
30%
24%
ASEC < DER
15%
15%
+10
+9
+3
+2
+1
Same
-1
-2
-3
-4
-5
-6
-7
-8
-9
-10
0%
3% 2%
1% 1% 1% 1%
+8
6%
+7
5%
+6
1% 2% 3%
+5
10%
10%
8%
+4
20%
ASEC > DER
26
Substituting Wages for Earnings
• Have a slight increase in the number of
persons who matched which rose from 52%
to 56 % overall reporting in the same category
• Since wages accounted for 93% of earnings,
increase is small
• Larger increase was for reporters (no imputes)
which rose from 62% to 71% reporting in the
same category
• Little change for imputed
27
Distribution of ASEC and DER Wages Class Differences, 2005:
(All)
Percent of Total
70%
60%
56%
50%
40%
30%
20%
10%
16%
11%
CPS-ASEC < DER
5%
3%
1% 1% 2%
0%
-10
-9
-8
-7
-6
-5
-4
-3
-2
CPS-ASEC > DER
-1 Same +1
+2
2% 1% 1%
+3
+4
+5
+6
+7
+8
+9 +10
$10,000 Class Categories
28
Another View
• Looked at the ratio of mean earnings
(ASEC/DER)
• Aggregate estimates are very similar---ASEC
slightly higher-• Thus ASEC aggregates obtained will be slightly
higher
29
Ratio of Mean Earnings, ASEC/DER
Percent
(Unit Counts)
ASEC/DER
Total
Not imputed
Imputed
ASEC earnings < 5% different from DER
99.9%
99.9%
99.9%
5% to < 10% different
98.9%
98.9%
99.4%
10% to < 15% different
97.1%
97.0%
97.6%
15% to < 20%different
95.4%
95.4%
95.5%
20% to < 25% different
92.8%
92.8%
92.5%
25% < 50% different
86.3%
89.3%
82.1%
50% < 75% to < 100% different
71.7%
87.9%
62.6%
75% to , 100% different
73.0%
104.1%
54.1%
100% or more different
370.0%
357.9%
379.4%
Total
103.0%
102.6%
104.3%
30
Ratio of ASEC to DER Earnings by Demographic Group,
Unit Counts
ASEC/DER
All
Gender
Men
Women
Race
White
Black
Hispanic
Other
Age
18 to 44
44 to 64
65 and Over
Family Type
Single Parent
Married with Kids
Married without Kids
Unrelated Individual
Total
103.0%
Not imputed
102.6%
Imputed
104.3%
104.1%
102.7%
102.8%
102.2%
104.3%
104.4%
102.9%
104.0%
102.8%
102.6%
102.7%
102.3%
100.0%
101.0%
103.4%
110.1%
111.6%
106.8%
104.8%
100.4%
110.7%
103.7%
100.9%
107.9%
108.6%
99.2%
116.6%
107.9%
101.9%
102.3%
105.7%
104.9%
101.9%
101.9%
104.8%
118.7%
102.0%
103.3%
108.9%
31
The Poverty Population
• Have results for the poverty population—both
total and for policy important demographic
groups
• Since many eligibility limits hover around
poverty, these results provide important
information
32
The Poverty Population
• When DER earnings substituted for ASEC
earnings, majority of persons do not change
poverty status
• Results hold for demographic groups as well
• Divergence is roughly symmetrical—slightly
more persons entered rather than leave
poverty
33
Change in Poverty Status When DER Earnings
Substituted for ASEC Earnings: 2005
No Imputes
Item Imputes
Whole Imputes
Total
No Change in
Poverty Status
94.4%
92.8%
89.2%
93.7%
Change from Poor to
Non-Poor
2.8%
3.0%
5.3%
3.0%
Change from NonPoor to Poor
2.9%
4.3%
3.0%
3.3%
Net Change NonPoor to Poor
0.1%
1.3%
0.3%
0.2%
34
Implications for Policy
• The changes do not dramatically alter
our understanding of the size and
composition of the poor as measured
by the Federal government
• Still need to analyze persons who did
not match to DER (JSM 2012 and
matches with highly dissimilar incomes)
• Supplemental Poverty Measures
35