USING THE PARETO DISTRIBUTION TO IMPROVE ESTIMATES OF TOPCODED EARNINGS

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Philip Armour; Richard V. Burkhauser; Jeff Larrimore;
(2014)
  • Subject:
    • jel: jel:D31 | jel:J31 | jel:C81 | jel:J01
    mesheuropmc: education | health care economics and organizations

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 ... View more
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    1972 1977 1982 1987 1992 1997 2002 2007 Pareto - internal data, maximum likelihood method (matches Enhanced Cell Mean Series) Pareto - public use data, proportional method Larrimore et al. cell means Fixed Multiple (1.4 times topcode) Public data, no cell means Sources: Author's calculation using Public-use and Internal March CPS Data.

    Mean Primary Earnings above Public Topcode 155,167.85 153,957.31 161,368.84 161,071.86 149,446.92 157,823.42 240,177.96 240,310.44 362,741.41 374,699.39 398,231.55 387,378.22 347,774.63 419,886.77 390,670.08 470,904.67 445,997.33 477,597.05 474,259.17 538,416.97 467,984.50 464,928.55 501,245.62 522,694.47 572,896.45 626,923.39 558,843.72

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