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Multiple imputation of right-censored wages in the German IAB Employment Sample considering heteroscedasticity

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Büttner, Thomas; Rässler, Susanne

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Corporate Editor Institut für Arbeitsmarkt- und Berufsforschung der Bundesagentur für Arbeit (IAB)
Abstract In many large data sets of economic interest, some variables, as wages, are top-coded or right-censored. In order to analyze wages with the German IAB employment sample we first have to solve the problem of censored wages at the upper limit of the social security system. We treat this problem as a missing data problem and derive new multiple imputation approaches to impute the censored wages by draws of a random variable from a truncated distribution based on Markov chain Monte Carlo techniques. In general, the variation of income is smaller in lower wage categories than in higher categories and the assumption of homoscedasticity in an imputation model is highly questionable. Therefore, we suggest a new multiple imputation method which does not presume homoscedasticity of the residuals. Finally, in a simulation study, different imputation approaches are compared under different situations and the necessity as well as the validity of the new approach is confirmed.
Keywords analysis; data; statistical analysis; data quality; income; wage difference; model construction
Classification Methods and Techniques of Data Collection and Data Analysis, Statistical Methods, Computer Methods; Labor Market Research
Document language English
Publication Year 2008
City Nürnberg
Page/Pages 22 p.
Series IAB Discussion Paper: Beiträge zum wissenschaftlichen Dialog aus dem Institut für Arbeitsmarkt- und Berufsforschung, 44/2008
Status Published Version
Licence Deposit Licence - No Redistribution, No Modifications
data provider This metadata entry was indexed by the Special Subject Collection Social Sciences, USB Cologne