Measurement errors in survey data on hourly pay may lead to serious upward bias in low payestimates. We consider how to correct for this bias when auxiliary accurately measured dataare available for a subsample. An application to the UK Labour Force Survey is described.The use of fractional imputation, nearest neighbour imputation, predictive mean matchingand propensity score weighting are considered. Properties of point estimators are comparedboth theoretically and by simulation. A fractional predictive mean matching imputationapproach is advocated. It performs similarly to propensity score weighting, but displaysslight advantages of robustness and efficiency.
Estimation of the Distribution of Hourly Pay from Household Survey Data: The Use of Missing Data Methods to Handle Measurement Error
22 May 2003
Working Paper (CWP12/03)