April 2020

IZA DP No. 13196: Modelling Errors in Survey and Administrative Data on Employment Earnings: Sensitivity to the Fraction Assumed to Have Error-Free Earnings

published in: Economics Letters, 2020, online first at https://doi.org/10.1016/j.econlet.2020.109253

Kapteyn and Ypma (Journal of Labour Economics 2007) is an influential study of errors in survey and administrative data on employment earnings. To fit their mixture models, Kapteyn and Ypma assume a specific fraction of their sample have error-free earnings. Using a new UK dataset, we assess the sensitivity of model estimates and post-estimation statistics to variations in this fraction and find some lack of robustness.