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using March CPS data for 1970 to 1980 and using 1984 SIPP for 1981 to 1985. Standard errors are adjusted for within family correlation when more than one sibling is present.
*Required years of positive earnings are: 1 for 2-year averages; 2 for 4-year averages; 3 for 7-year averages; 7 for 10-year averages; and 11 for 16-year averages. this analysis. In the top panel of the table, fathers’ earnings
must be positive in each year. In the lower panel, some years
of zero earnings are allowed. Within each panel, there are
three additional selection rules: noncovered fathers are
dropped; noncovered fathers’ earnings are imputed; and
government and self-employed fathers and noncovered fathers are dropped. In the ﬁrst set of results in the top panel
(row 1 of table 4), it is not necessary to actually identify
covered status, because all fathers with years of zero earnings are dropped. Therefore, it is possible to construct
averages that include years prior to 1979. Under the second
rule (estimates in row 2), in contrast, averages can only be
constructed going back to 1979, because it is difﬁcult to
identify covered status in prior years. Under the third rule
(row 3), those identiﬁed as government or self-employed
workers at any time during the 1984 SIPP survey period are
The results from using the two-year average with SER
data are clearly lower than what was found using the SIPP.
The highest coefﬁcient is 0.289 when noncovered fathers
are dropped from the analysis. The fact that many fathers
have noncovered earnings (in addition to covered earnings)
that are not captured in the SER data is the obvious explanation for the greater attenuation using the SER data. In
fact, when noncovered fathers are dropped and earnings are
required to be at least $3,000 in each year, thereby eliminating many of those whose covered earnings severely
misrepresent their true earnings, the estimated coefﬁcient rises to 0.334 (not shown), which is comparable to the SIPP
results from table 3. This suggests that...
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This document was uploaded on 02/26/2014 for the course ECON 560 at The University of British Columbia.
- Fall '13