USING THE PARETO DISTRIBUTION TO IMPROVE ESTIMATES OF TOPCODED EARNINGS

Philip Armour, Richard Burkhauser and Jeff Larrimore

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: Inconsistent censoring in the public-use March Current Population Survey (CPS) limits its usefulness in measuring labor earnings trends. Using Pareto estimation methods with less-censored internal CPS data, we create an enhanced cell-mean series to capture top earnings in the public-use CPS. We find that previous approaches for imputing topcoded earnings systematically understate top earnings. Annual earnings inequality trends since 1963 using our series closely approximate those found by Kopczuk, Saez, & Song (2010) using Social Security Administration data for commerce and industry workers. However, when we consider all workers, earnings inequality levels are higher but earnings growth is more modest

Pages: 19 pages
Date: 2014-04
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Citations: View citations in EconPapers (9)

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https://www2.census.gov/ces/wp/2014/CES-WP-14-21.pdf First version, 2014 (application/pdf)

Related works:
Journal Article: USING THE PARETO DISTRIBUTION TO IMPROVE ESTIMATES OF TOPCODED EARNINGS (2016)
Working Paper: Using the Pareto Distribution to Improve Estimates of Topcoded Earnings (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:14-21

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