What’s my wage again?
Comparing survey and administrative data to validate earning measures
One question frequently included in surveys asks about respondents’ earnings. As this information serves, for example, as a basis for evaluating policy interventions, it must be of high quality. This study aims to advance knowledge about possible measurement errors in earnings data and the potential of data linkage to improve substantive conclusions. We use the German sample of the Programme for the International Assessment of Adult Competencies (PIAAC), a subsample of which could be linked to administrative data from the German Integrated Employment Biographies (IEB). We define measurement error as the difference between administrative and survey data. Our results show differences in the ordinary least squares estimates when the administrative and survey measures of earnings were used as the respective dependent variable, which suggests that measurement error causes biased results. Learning more about the size and type of measurement error can help to correct existing biases and improve the quality of survey data.