Income Data for Policy Analysis: A Comparative Assessment of Eight Surveys. Persons 51 and Older

12/23/2008

Our comparative analysis of income data from the HRS is based on the RAND file, which contains a constructed measure of family income without the value of Food Stamps (included by RAND in constructed income for sample persons). We selected this variable so that we would be able to estimate poverty status. While we cannot aggregate family income because this would double count the incomes of spouses and other family members, we can calculate the average family income of persons 51 and older and in so doing obtain comparable estimates across surveys.

One other point about our comparisons should be noted. While the HRS collects data from age-eligible sample members and their spouses, the records of spouses who are not themselves age-eligible are not assigned weights.37 Furthermore, about half of the youngest age-eligible sample members and spouses—that is, those who were born in 1953—were still 50 at the time of their 2004 interviews while the other half had turned 51. To make the comparison samples comparable on age, we chose to restrict our estimates to persons 51 and older.

TABLE IV.39

DISTRIBUTION OF PERSONAL INCOME AMONG PERSONS 65 AND OLDER AND LIVING WITH NO RELATIVES: MCBS AND CENSUS BUREAU SURVEYS
Income CPS ACS SIPP MCBS2
Millions of Persons
Single1 11.34 11.24 11.03 10.79
(Income)$10,000 or less 3.06 3.11 3.02 2.66
(Income)$10,001 to $20,000 4.65 4.01 4.36 4.13
(Income)$20,001 to $35,000 2.15 2.41 2.53 2.59
(Income)$35,001 to $50,000 0.70 0.87 0.68 0.90
(Income)$50,001 or more 0.77 0.84 0.45 0.50
Percent of Persons
Single1 100.0 100.0 100.0 100.0
(Income)$10,000 or less 27.0 27.7 27.3 24.7
(Income)$10,001 to $20,000 41.0 35.7 39.5 38.3
(Income)$20,001 to $35,000 18.9 21.5 23.0 24.0
(Income)$35,001 to $50,000 6.2 7.7 6.1 8.4
(Income)$50,001 or more 6.8 7.4 4.1 4.6

Source:  Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, and the 2003 MCBS Cost and Use file, and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

1.Includes persons living with a non-relative.
2. Medicare beneficiaries only.  Income, reported for 2003, has been deflated to 2002 dollars by the CPI-U

The weighted total persons 51 and older in the HRS exceeds those of the three Census Bureau surveys by 4.0 to 5.7 million (Table IV.40). Distributions by age, sex, and race/ethnicity are similar across the four surveys. HRS sample members are somewhat less likely to be single and more likely to be living with relatives in addition to a spouse (typically their children). Reported receipt of SSI and welfare or Food Stamps in the HRS is similar to the CPS and ACS but substantially below SIPP—3.2 percent versus 5.3 percent for SSI and 4.5 percent versus 6.3 percent for welfare and/or Food Stamps. The proportion reporting a health status of fair or poor is essentially the same across the HRS, CPS, and SIPP.

The average family income of persons 51 and older in the HRS is 27 percent higher than the comparable figure from the CPS (Table IV.41). At $72,303 the average family income from the HRS exceeds the CPS estimate by $15,500, the ACS estimate by $13,700, and the SIPP estimate by nearly $20,800. The HRS exceeds the other surveys by a somewhat greater margin proportionately among persons living with spouses versus no relatives. Because couples have more than double the family income of singles, the gap between the HRS and the other surveys is much greater for sample members living with a spouse than living alone. Among singles, the HRS average income exceeds the CPS average by $6,000. Among married persons the HRS average family income exceeds the CPS estimate by nearly $18,000.

The quintile boundaries are higher than those of the other surveys (Table IV.42). At the 20th percentile the HRS exceeds the CPS by $3,000. At the 80th percentile the HRS exceeds the CPS by $14,000. The ratio of the 80th to the 20th percentiles, one of the measures of income inequality used earlier in this chapter, is essentially the same in the two surveys, however (5.10 in the HRS compared to 5.18 in the CPS).

Average family income by quintile shows a similar pattern but the gap between the HRS and the CPS jumps to $54,000 in the top quintile (Table IV.43). While the ratio of average family income between the fourth and lowest quintiles is the same in the two surveys, the ratio between the highest and lowest quintiles exceeds that in the CPS by 17 percent.

TABLE IV.40

CHARACTERISTICS OF PERSONS 51 AND OLDER:HRS AND CENSUS BUREAU SURVEYS
  Percent of Persons
Characteristic CPS ACS SIPP HRS
Total Persons 76.15 74.44 75.38 80.18
Sex
Male 45.6 45.4 45.6 46.0
Female 54.4 54.6 54.4 54.0
Age
51 to 64 55.1 54.9 55.0 55.8
65 and older 44.9 45.1 45.0 44.2
Race/Ethnicity
White, non-Hispanic 79.3 79.6 80.4 81.2
Black, non-Hispanic 9.3 9.2 9.0 9.3
Hispanic 7.0 6.7 6.8 6.9
Other 4.4 4.6 3.8 2.6
Family Composition
Single 25.8 26.8 26.6 22.2
With a spouse/partner only1 46.1 46.1 46.0 45.3
With other relatives2 28.1 27.2 27.5 32.6
With welfare or food stamps 3.7 5.0 6.3 4.5
With SSI 3.2 3.5 5.3 3.2
Health status fair or poor 26.1 NA 25.9 26.5

Source:   Mathematica Policy Research, Inc., from 2003 CPS ASEC supplement, the 2002 ACS, the 2001 SIPP panel, and the 2004 HRS.

1. Includes persons living with a spouse or (HRS only) unmarried partner but no other relatives of either.
2. Includes both married and unmarried persons living with other relatives.

TABLE IV.41

AVERAGE FAMILY INCOME BY FAMILY COMPOSITION:HRS AND CENSUS BUREAU SURVEYS
Income Estimate CPS ACS SIPP HRS
Family Income in Dollars
All Persons 56,800 58,625 51,546 72,303
(Family Composition)Single 26,954 28,522 24,713 32,974
(Family Composition)With a spouse/partner only1 63,156 66,365 57,013 81,039
(Family Composition)With other relatives2 73,764 75,177 68,336 86,916
Percent of CPS
All Persons 100.0 103.2 90.7 127.3
(Family Composition)Single 100.0 105.8 91.7 122.3
(Family Composition)With a spouse/partner only1 100.0 105.1 90.3 128.3
(Family Composition)With other relatives2 100.0 101.9 92.6 117.8

Source: Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, and the 2004 HRS (reported for 2003 but deflated to 2002 dollars by the CPI-U) and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

1.Includes persons living with a spouse or (HRS only) unmarried partner but no other relatives of either.
2.Includes both married and unmarried persons living with other relatives.

TABLE IV.42

QUINTILES OF FAMILY INCOME AMONG PERSONS 51 AND OLDER: HRS AND CENSUS BUREAU SURVEYS
Quintile Boundaries CPS ACS SIPP HRS
Family Income in Dollars
(Percentile Value)20 %-ile 16,348 17,900 17,892 19,359
(Percentile Value)40 %-ile 30,600 32,900 31,020 36,200
(Percentile Value)60 %-ile 50,380 52,400 47,743 58,923
(Percentile Value)80 %-ile 84,721 85,400 75,087 98,788
Ratio of 80th to 20th %-ile 5.18 4.77 4.20 5.10
Percent of CPS
(Percentile Value)20 %-ile 100.0 109.5 109.4 118.4
(Percentile Value)40 %-ile 100.0 107.5 101.4 118.3
(Percentile Value)60 %-ile 100.0 104.0 94.8 117.0
(Percentile Value)80 %-ile 100.0 100.8 88.6 116.6
Ratio of 80th to 20th %-ile 100.0 92.1 81.0 98.5

Source: Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, and the 2004 HRS (reported for 2003 but deflated to 2002 dollars by the CPI-U) and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

TABLE IV.43

AVERAGE FAMILY INCOME BY QUINTILE OF FAMILY INCOME: HRS AND CENSUS BUREAU SURVEYS
Income Estimate CPS ACS SIPP HRS
All Persons 56,800 58,625 51,546 72,303
Family Income Quintile
Lowest 9,795 10,439 11,030 11,442
Second 23,271 25,134 24,317 27,428
Third 39,661 42,170 39,047 46,933
Fourth 65,756 67,110 60,069 76,563
Highest 145,530 148,356 123,312 199,246
Ratio of fourth to lowest 6.71 6.43 5.45 6.69
Ratio of highest to lowest 14.86 14.21 11.18 17.41
Percent of CPS
All Persons 100.0 103.2 90.7 127.3
(Family Income Quintile)Lowest 100.0 106.6 112.6 116.8
(Family Income Quintile)Second 100.0 108.0 104.5 117.9
(Family Income Quintile)Third 100.0 106.3 98.5 118.3
(Family Income Quintile)Fourth 100.0 102.1 91.4 116.4
(Family Income Quintile)Highest 100.0 101.9 84.7 136.9
Ratio of fourth to lowest 100.0 95.8 81.1 99.7
Ratio of highest to lowest 100.0 95.6 75.2 117.2

Source: Mathematica Policy Research, from tabulations of calendar year 2002 income from the 2003 CPS ASEC supplement, the 2001 SIPP panel, and the 2004 HRS (reported for 2003 but deflated to 2002 dollars by the CPI-U) and prior 12 months income, inflation-adjusted to calendar year 2002, from the 2002 ACS.

 

Poverty rates in the HRS and the Census Bureau surveys are more similar than we might have guessed from the differences in average family income. The poverty rate of 8.4 percent in the HRS is a full percentage point below the CPS poverty rate, but it lies between the ACS and SIPP poverty rates (Table IV.44). The fraction of persons 51 and older who are near near-poor or low-income in the HRS (15.7 percent and 24.1 percent, respectively) is below that of the other three surveys, however. For the low-income population the differences range from 2.0 to 4.6 percentage points.

Does the HRS simply capture more income than the other surveys, or does it over-represent higher income families? We asked the same question with respect to the PSID, which has run for much longer than the HRS. After 40 years, it is easy to imagine that the PSID would have drifted from its most representative state. Nevertheless, the data we examined did not allow us to answer that question for the PSID. For the HRS, the differences with the other surveys are more substantial, particularly at higher income levels. Yet the comparison of selected characteristics did not reveal anything striking. With respect to those characteristics, the HRS is not markedly different from the other surveys. We are left with the observation that HRS incomes are higher than those of the three Census Bureau surveys, but resolving whether this is due to better measurement or over-representation of higher-income families must be left to future research.

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