Employment misclassification in survey and administrative reports

Motu working paper 16-19
21 October 2016

Surveys have errors.    
Tax data errors are rare,    
but they still matter.

This paper analyses measurement error in the classification of employment. We show that the true employment rate and time-invariant error rates can be identified, given access to two measures of employment with independent errors. Empirical identification requires at least two periods of data over which the employment rate varies. We estimate our model using matched survey and administrative data from Statistics New Zealand’s Integrated Data Infrastructure. We find that both measures have error, with the administrative data being substantially more accurate than the survey data. In both sources, false positives are much more likely than false negatives. Allowing for errors in both sources substantially affects estimated employment rates.

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Suggested Citation

Dean Hyslop, Wilbur Townsend, 2016, Employment misclassification in survey and administrative reports, Motu Economic and Public Policy Research, viewed 30 April 2017, <http://apo.org.au/node/68510>.

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