Studies of Welfare Populations: Data Collection and Research Issues. Hours Worked

06/01/2002

The number of empirical investigations concerning the quality of household reports of hours worked are few in number but consistent with respect to the findings. Regardless of whether the measure of interest is hours worked last week, annual work hours, usual hours worked, or hours associated with the previous or usual pay period, comparisons between company records and respondents' reports indicate an overestimate of the number of hours worked. We note that none of the empirical studies examined in the following text focuses specifically on the low-income or welfare populations.

Carstensen and Woltman (1979) assessed reports of "usual" hours worked per week. They found that compared to company reports, estimates of the mean usual hours worked were significantly overreported by household respondents: 37.1 hours versus 38.4 hours, respectively, a difference on average of 1.33 hours, or 3.6 percent of the usual hours worked. Similarly, Mellow and Sider (1983) report that the mean difference between the natural log of worker-reported hours and the natural log of employer-reported hours is positive (.039). Self-reports exceeded employer records by nearly 4 percent on average; however, for approximately 15 percent of the sample, the employer records exceeded the estimate provided by the respondent. A regression explaining the difference between the two sources indicates that professional and managerial workers were more likely to overestimate their hours, as were respondents with higher levels of education and nonwhite respondents. In contrast, female respondents tended to underreport usual hours worked.

Similar to their findings concerning the reporting of earnings, Rodgers et al. (1993) report that the correlation between self-reports and company records is higher for annual number of hours worked (.72) than for either reports of hours associated with the previous pay period (.61) or usual pay period (.61). Barron et al. (1997) report a high correlation between employers' records and respondents' reports of hours last week, .769. Measurement error in hours worked is not independent of the true value; as reported by Rodgers et al. (1993), the correlation between error in reports of hours worked and true values (company records) ranged from -.307 for annual hours worked in the calendar year immediately prior to the date of the interview to -.357 for hours associated with the previous pay period and -.368 for hours associated with usual pay period.

Examination of a standard econometric model with earnings as the left-hand-side variable and hours worked as one of the predictor variables indicates that the high correlation between the errors in reports of earnings and hours (ranging from .36 for annual measures to .54 for last pay period) seriously biases parameter estimates. For example, regressions of reported and company record annual earnings (log) on record or reported hours, age, education, and tenure with the company provide a useful illustration of the consequences of measurement error. Based on respondent reports of earnings and hours, the coefficient for hours (log hours) is less than 60 percent of the coefficient based on company records (.41 versus 1.016) while the coefficient for age is 50 percent larger in the model based on respondent reports. In addition, the fit of the model based on respondent reports is less than half that of the fit based on company records (R2 of .352 versus .780).

Duncan and Hill (1985) compare the quality of reports of annual hours worked for two different reference periods, the prior calendar year and the calendar year ending 18 months prior to the interview. The quality of the household reports declines as a function of the length of the recall period, although the authors report significant overreporting for each of the two calendar years of interest. The average absolute error in reports of hours worked (157 hours) was nearly 10 percent of the mean annual hours worked for 1982 (=1,603) and nearly 12 percent (211 hours) of the mean for 1981 (=1,771). Comparisons of changes in hours worked reveal that although the simple differences calculated from two sources have similar averages, the absolute amount of change reported in the interview significantly exceeds that based on the record report.

In contrast to the findings with respect to annual earnings, we see both a bias in the population estimates as well as a bias in the individual reports of hours worked in the direction of overreporting. This finding persists across different approaches to measuring hours worked, regardless of whether the respondent is asked to report on hours worked last week (CPS) or account for the weeks worked last year, which then are converted to total hours worked during the year (Panel Study of Income Dynamics [PSID]). Whether this is a function of social desirability or whether it is related to the cognitive processes associated with formulating a response to the questions measuring hours worked is something that can only be speculated on at this point. One means by which to attempt to repair the overreporting of hours worked is through the use of time-use diaries, where respondents are asked to account for the previous 24-hour period. Employing time-use diaries has been found to be an effective means for reducing response error associated with retrospective recall bias as well as bias associated with the overreporting of socially desirable behavior (Presser and Stinson, 1998).

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