On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages

Marco Caliendo, Katrin Huber, Ingo Isphording and Jakob Wegmann ()
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Jakob Wegmann: Rockwool Foundation Berlin

No 103, CEPA Discussion Papers from Center for Economic Policy Analysis

Abstract: We study the extent, correlates, and consequences of reporting bias in survey wages using German linked survey-administrative data (SOEP-CMI-ADIAB). Survey wages differ systematically from administrative records: mean survey wages are 7% lower, and discrepancies follow a mean-reverting pattern. Individual characteristics explain little of the reporting bias, whereas firm context explains most of the variation. Since neither data source alone is sufficient, we construct a hybrid wage that combines their respective strengths. Measurement choice matters, but in ways that depend on how administrative top-coding is handled across the full wage distribution: when wages are outcomes, censoring administrative wages at the assessment limit understates returns to education by 4–11% and the gender wage gap by up to 23%, while imputation reverses the bias for returns to education. When wages are regressors, wage-satisfaction gradients are 9–28% steeper with survey than with administrative wages below the assessment limit, a pattern inconsistent with classical attenuation bias and pointing to non-classical, context-dependent misreporting. We provide guidance for choosing between administrative, survey, and hybrid wages depending on the application, with lessons that extend to any setting where self-reported wages are collected alongside top-coded administrative records.

Keywords: reporting bias; measurement error; wage; income; administrative data; survey data; data linkage (search for similar items in EconPapers)
JEL-codes: C81 D31 J30 (search for similar items in EconPapers)
Date: 2026-07
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https://doi.org/10.25932/publishup-70765 (application/pdf)

Related works:
Working Paper: On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages (2026)
Working Paper: On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages (2025)
Working Paper: On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:pot:cepadp:103

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