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Earnings are a key outcome in evaluating the impact of job training and other employment- oriented assistance programs. Adequate and sustained earnings provide a reliable measure of success for these interventions and contribute to other positive outcomes as well. Accordingly, high quality data on the income earned from employment—including self-employment—are an essential component of any analysis that seeks to understand the consequences of participating in an employment-assistance program.

The report describes several sources of data on wages or earnings and is addressed to researchers in a variety of settings who wish to incorporate reports of earned income in an evaluation or analysis. These sources include administrative records, custom surveys of study participants, and existing general population surveys.

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Key Takeaways

• Access is an issue for all five administrative earnings data sources. Government tax data can only be accessed on-site or from approved locations. In addition, analysis products require official review for potential disclosure issues. State-level data on unemployment insurance (UI) may be de-identified or otherwise limited depending on the providing state.
• Coverage varies between administrative data sources. For example, state UI wage data excludes federal and military employment, while some tax data sources report taxable—not gross—income. All administrative sources exclude informal sources of income which may be captured by survey data.
• Earnings data from self-employment may not be reliable. State UI data do not capture self-employment, and self-employment income is underreported to the IRS by about two thirds. Further, most self-employment income does not correspond to amounts reported on pay stubs, so there may not be a reliable reference for survey respondents to report.
• Periodicity of the data is an important consideration. UI data is updated quarterly, while tax data are annual. Tax data can be easier to work with, but quarterly data enable better measurement of employment over time and greater flexibility in measurement.

Citation

Czajka, J., Patnaik, A., Negoita, M. (2018). Mathematica. Data on Earnings: A Review of Resources for Research Report. Chief Evaluation Office, U.S. Department of Labor.

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The Department of Labor’s (DOL) Chief Evaluation Office (CEO) sponsors independent evaluations and research, primarily conducted by external, third-party contractors in accordance with the Department of Labor Evaluation Policy and CEO’s research development process.