Income Data for Policy Analysis: A Comparative Assessment of Eight Surveys. Differences by Source of Income

12/23/2008

Not surprisingly, allocation rates differ more widely by source than by income level, and they are more consistent across surveys. Nevertheless, there are important differences by survey as well. The percentage of persons with any allocation is highest for asset income in the CPS, SIPP and MEPS, but asset income is no worse than wage and salary income in the ACS, where allocation rates vary little by source (Table VI.4). The SIPP is striking with almost half of the persons with income from any source having their amounts for that source allocated. But except for asset income and pensions, for which 90 percent and 65 percent of recipients, respectively, have some portion of their income allocated, there is little variation by source in the SIPP allocation rates.

Outside of assets and self-employment income, the CPS also shows little variation by source, although this is undoubtedly influenced by the 8 percent of CPS respondents whose ASEC supplement data are fully allocated. If these persons were removed from the numerator and denominator of the allocation rates, we would see greater variation by source, with SSI and welfare having only a third of the allocation frequency of asset income.

TABLE VI.4

PERCENT OF PERSONS WITH ALLOCATED INCOME BY SOURCE: FIVE SURVEYS
Source of Income CPS ACS SIPP MEPS NHIS
Percent of Persons with Any AllocationAmong Persons with Income Source
Total Income (NHIS family income) 52.2 21.2 80.5 54.3 33.3
Wages and Salaries (NHIS earnings) 32.1 19.5 49.5 44.5 32.9
Self-employment 45.2 18.5 53.2 NA NA
Asset Income 62.9 19.4 90.3 63.0 NA
Social Security or Railroad Ret. 35.6 18.3 46.9 41.5 NA
SSI 27.9 17.4 47.0 7.9 NA
Welfare 27.6 17.9 50.3 11.7 NA
Pensions 37.2 17.1 65.1 38.4 NA

Source:  Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, the 2002 Full-year Consolidated MEPS-HC, and the 2003 NHIS, and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

MEPS shows very similar allocation rates—ranging from 39 percent to 43 percent—across wages and salaries, Social Security or Railroad Retirement, and pensions.60 Yet SSI and welfare have exceedingly low allocation rates—just 8 percent and 12 percent, respectively.  These rates are markedly lower than those for any source in any other survey, which prompts us to ask what is different about these items. We have no answer, however.  

The NHIS does not collect income by source, but we note that the proportion of persons with allocated family income is the same as the proportion with allocated earnings.

When measured by the percentage of dollars allocated, the patterns of allocation rates by source are reasonably similar across the CPS, SIPP, and MEPS except for the very low allocation rates for SSI (8 percent) and welfare income (14 percent) in MEPS (Table VI.5). About 60 percent of asset income is allocated in all three surveys, whereas the allocation rate for wage and salary income ranges from 29 to 43 percent.

If we look at how much of total income consists of allocated income by source, we see that in every survey, wages and salaries dominate everything else.61 Allocated wage and salary income is 25 percent of total income in the CPS, 13 percent in the ACS, 21 percent in the SIPP and 36 percent in MEPS (Table VI.6). Allocated self-employment income varies from just 1.4 percent of total income in ACS to 4.2 percent of total income in SIPP. Allocated asset income accounts for only 1 to 3 percent of total income in any of the surveys, and the same is true of Social Security income. Allocated pensions range from 1 to 3 percent of total income while allocated self-employment income is 0.6 to over 4 percent of total income. The contribution of allocated welfare income is measured in hundredths of a percent.

TABLE VI.5

PERCENT OF INCOME ALLOCATED BY SOURCE: FIVE SURVEYS
Source of Income Percent of Dollars Allocated
CPS ACS SIPP MEPS NHIS
Total Income (NHIS family income) 34.2 17.6 32.4 42.7 32.4
Wages and Salaries (NHIS earnings) 32.0 17.2 28.9 43.3 31.8
Self-employment 44.7 23.1 39.5 NA NA
Asset Income 62.6 19.4 60.8 62.0 NA
Social Security or Railroad Ret. 35.5 18.5 31.5 40.7 NA
SSI 28.0 16.7 27.4 7.9 NA
Welfare 29.2 17.9 36.0 13.5 NA
Pensions 35.4 16.2 50.6 40.9 NA

Source: Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, the 2002 Full-year Consolidated MEPS-HC, and the 2003 NHIS, and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

TABLE VI.6

ALLOCATED INCOME BY SOURCE AS A PERCENT OF TOTAL INCOME: FIVE SURVEYS
  Allocated Dollars by Source as Percent of Total Income
Source of Income CPS ACS SIPP MEPS NHIS
Total 34.19 17.63 32.37 42.71 NA
Wages and Salaries 24.85 13.07 20.73 35.81 NA
Self-employment 2.27 1.42 4.23 NA NA
Asset Income 2.57 0.97 1.46 2.15 NA
Social Security or Railroad Ret. 2.14 1.04 2.03 2.32 NA
SSI 0.11 0.07 0.16 0.05 NA
Welfare 0.03 0.02 0.06 0.01 NA
Pensions 1.36 0.78 3.06 1.61 NA

Source: Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, the 2002 Full-year Consolidated MEPS-HC, and the 2003 NHIS, and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

Lastly, we compare the distribution of total income and allocated income by source. Across the four surveys, wages and salaries account for about three-quarters of total income and allocated income, on average, with MEPS higher and SIPP lower (Table VI.7). The possibility that most self-employment income in MEPS may be recorded as wages and salaries has been noted, along with other anomalies (see Chapter IV, section C). Asset income and Social Security income account for 2 to 6 percent of total income but a more consistent 5 to 6 percent of allocated income if we exclude the 7.5 percent share in the CPS. Pensions are 4 to 5 percent of both total income and allocated income in the CPS, ACS, and MEPS, but they account for 6 percent of total income and 9 percent of allocated income in the SIPP. SSI accounts for about half a percent of total income or allocated income across the four surveys while welfare income represents less than 0.2 percent. Clearly, the allocation rate on any source but wage and salary income will have at best a modest impact on total income, and for some sources the potential impact is entirely negligible.

View full report

Preview
Download

"report.pdf" (pdf, 4.33Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®