Bias from Unit Non-Response in the Measurement of Income in Household Surveys

Declining response rates to surveys is a widespread and troubling problem. Unit non-response (when a household is not interviewed at all) has been rising in most surveys. For example, unit non-response rates rose by 3-12 percentage points over the 1990s for six U.S. Census Bureau surveys (Atrostic et al. 2001). Many recent papers have raised the concern that this increased non-response has led to bias in key statistics. In light of this concern, we propose a new method to evaluate and correct bias from unit non-response. We apply this method to the Current Population Survey (CPS), the most used economic survey and the source of official employment, income, poverty, inequality and health insurance coverage information. Specifically, we use addresses to link the 2011 CPS Annual Social and Economic Supplement (CPS ASEC) to IRS Form 1040 records. This link allows us to compare several characteristics of respondents and non-respondents, including income and some of its components, self-employment status, marital status, number of children, and the receipt of social security. We find little evidence of differences between the percentiles of the income distribution of the linked respondents and nonrespondents. We also find little difference between the respondent distribution, conventionally adjusted for non-response, and the combined respondent and non-respondent distributions. Significant differences between respondent and non-respondents are found for the number of children, and some other characteristics. We then compare our new method of assessing unitnonresponse bias to prior methods. JEL CODES: C81, D31, I32