Missing income data in the German SOEP Incidence, imputation and its impact on the income distribution

Abstract

'Based on data from the German Socio-Economic Panel study (SOEP) this paper deals with the question of selectivity of missing data on income due to item-non-response and with imputation as one alternative strategy to cope with this issue. In contrast to cross-section surveys, the imputation of missing values in such panel data can profit from longitudinal information which is available for the very same observation units from other points in time. The 'row-and-column imputation procedure' developed by Little and Su (1989) considers longitudinal as well as cross-sectional information in the imputation process. This procedure is applied to the SOEP when deriving annual income variables, complemented by purely cross-sectional techniques. Our empirical work starts with a description of the overall incidence of imputation and its relevance given by imputed income as a percentage share of the total income mass: While e.g. 21% of all observations have at least one missing income component of their pre-tax posttransfer income, 9% of the overall income mass is imputed. However, this picture varies considerably for more recent sub-samples of the panel survey. Secondly, we analyse the respective impact of imputation on the personal distribution of income as well as on results of income mobility. When comparing income inequality measures based only on truly observed information to those derived from all (i.e., observed and imputed) observations, we find a small increase in inequality due to imputation and this effect appears to be relevant in both tails of the distribution. Longitudinal analyses support the hypothesis of missing income data being a predictor of subsequent unit-non-response. We also find unit-non-response to be positively correlated with item-non-response in previous waves of the panel survey. Finally, multivariate models show that survey-related factors (number of interviews, interview mode) as well as indicators for variability in income receipt (due to increased complexity of household structure and income composition) are significantly correlated with item-nonresponse. Summing up, our empirical results based on the German SOEP indicate the selectivity of item-non-response on income questions in social surveys and push the necessity for adequate imputation.' (author's abstract)Auf der Grundlage von Daten des deutschen Sozio-oekonomischen Panels (SOEP) wird die Frage der Selektivitaet von fehlenden Einkommensdaten infolge von Item-Non-Response untersucht. Im Gegensatz zu Laengsschnittstudien kann die Unterstellung von fehlenden Werten in solchen Paneldaten von der laengsschnittlichen Information profitieren, die fuer genau dieselben Beobachtungseinheiten fuer andere Zeitpunkte verfuegbar ist. Die vorliegende empirische Studie beginnt mit einer Beschreibung dieses Verfahrens und seiner Bedeutung. Es wird zweitens der Einfluss dieser Prozedur sowohl auf die personelle Einkommensverteilung als auch auf die Ergebnisse der Einkommensmobilitaet analysiert. Laengsschnittstudien unterstuetzen dabei die Hypothese, dass fehlende Einkommensdaten ein Praediktor fuer nachfolgenden Unit-Non-Response sind. Multivariate Modelle zeigen schliesslich, dass erhebungsbezogene Faktoren (Anzahl der Interviews, Interviewart) wie auch Indikatoren fuer die Variabilitaet im Einkommen (aufgrund der zunehmenden Komplexitaet der Haushaltsstruktur und der Einkommenszusammensetzung) in signifikanter Weise mit Item-Non-Response korreliert sind. (ICIUebers)German title: Fehlende Einkommensdaten im deutschen SOEP: Haeufigkeit, Bereinigung und Einfluss auf die EinkommensverteilungAvailable from Deutsches Institut fuer Wirtschaftsforschung -DIW Berlin-, Berlin (DE) / FIZ - Fachinformationszzentrum Karlsruhe / TIB - Technische InformationsbibliothekSIGLEDEGerman