A comparison of sample survey measures of earnings of English graduates with administrative data
Journal of the Royal Statistical Society. Series A: Statistics in Society
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Britton, J., Shephard, N., & Vignoles, A. V. (2019). A comparison of sample survey measures of earnings of English graduates with administrative data. Journal of the Royal Statistical Society. Series A: Statistics in Society, 182 (3), 719-754. https://doi.org/10.1111/rssa.12382
Administrative data sets are increasingly used in research due to their excellent coverage and large scale. However, in the UK the use of administrative data on individuals’ earnings, and particularly graduates’ earnings, is novel. Understanding the strengths and weaknesses of such data is important as they are set to be used extensively for research purposes and to inform policy. Here we compare survey based labour earnings data from the UK’s Labour Force Survey (LFS) with UK government administrative sources of individual level earnings data, focusing separately on young (up to age 32) graduates and non-graduates. This type of administrative dataset has few sample selection issues, is longitudinal and its large samples mean the earnings of sub-populations can potentially be studied with low error. Overall we find a similar share of individuals with zero earnings in the LFS and administrative data, but a considerably higher share (conditional on working) earning below £8,000 in the administrative data. The LFS has generally higher earnings right through the distribution, though above the median a large share of the differences can potentially be explained by employee pension contributions. We also find considerably larger gender difference in the survey data. The findings hold for both graduates and non-graduates. These differences are substantively important and suggest different conclusions about the gender wage gap, the graduate earnings premium and the extent of earnings inequality.
Nuffield Foundation (EDU/41336)
External DOI: https://doi.org/10.1111/rssa.12382
This record's URL: https://www.repository.cam.ac.uk/handle/1810/280723