published in: Journal of Labor Economics, 2004, 22 (3), 689-722
About 30% of workers in the CPS have earnings imputed. Wage gap estimates are biased
toward zero when the attribute being studied (e.g., union status) is not a criterion used to
match donors to nonrespondents. An expression for “match bias” is derived in which
attenuation equals the sum of match error rates. In practice, attenuation can be approximated
by the proportion with imputed earnings. Union wage gap estimates with match bias removed
are presented for 1973-2001. Estimates in recent years are biased downward 5 percentage
points. Bias in gap estimates accompanying other non-match criteria (public sector, industry,
etc.) is examined.
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