Estimating Measurement Error in SIPP Annual Job Earnings: A Comparison of Census Survey and SSA Administrative Data

The third chapter investigates measurement error in SIPP annual job earnings data linked to SSA administrative earnings data. The multiple earnings measures provided by the survey and administrative data enable the identification of components of true variation and variation due to measurement error. We find that 18% of the variation in SIPP annual job earnings can be attributed to measurement error. We also find that in both the SIPP and the DER, measurement error is persistent over time. A lower level of auto-correlation in the SIPP measurement error than in the economic error component leads to a lower reliability ratio of .62 for first-differenced earnings.