Conference Paper Joint Empirical Social Science Seminar
A Comparison of Earnings Measures from Longitudinal and Cross-sectional Surveys: Evidence from the UK
06 Dec 2006
This paper compares earnings data from the British Household Panel Survey with those collected in the Family Resources Survey, using several measures, which account for various key aspects of the two surveys, and contrasting two different points in time (1995/96 and 2003/04), allowing us to assess the possible extent of differential attrition in the BHPS data. We first perform non-parametric tests of equality at the centre of the distributions and over the whole earnings distributions. We then apply multivariate regression methods to establish whether the FRS and BHPS earnings data yield different results in relation to three typical uses of earnings data: the probability of being at the bottom or at the top of the earnings distribution, the estimation of earnings functions and, using earnings as an explanatory variable, the probability of belonging to an occupational pension plan. Most of our analyses reveal that the two surveys have fairly similar earnings data in the first comparison year, while sizable differences emerge in the later comparison. This finding is generally robust to the use of alternative earnings definitions and to the type of analysis performed, and thus suggests the important role played by attrition and ‘vintage’ effects.