The Future of the Survey of Income and Program Participation (1993) / Chapter Skim
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3 ACHIEVING SIPP's GOALS
3 ACHIEVING SIPP's GOALS
Pages 43-90
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From page 43... ...
We also consider in this chapter the role of both the Current Population Survey (CPS) March income supplement and administrative records in the achievement of SIPP's goals.
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From page 44... ...
For many years, the focus of official measures in the United States has been one component of economic resources, namely, regular cash income before taxes.2 Since the early 1980s, the Census Bureau has supported research on experimental income measures that subtract out most taxes (which represent a use of resources that makes them unavailable to support consumption) and that take account of other kinds of resources, including major types of in-kind benefits (Bureau of the Census, 1982, 1988b, 1990a, l990b, l991b)
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From page 45... ...
In comparison with the March CPS income supplement, however, SIPP has achieved markedly reduced rates of nonresponse for amounts of virtually all types of income. For example, about 8 percent of recipients of Supplemental Security Income (SSI)
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From page 46... ...
military retirement pay National Guard or Reserve forces retirement State government pension Local government pension Income from paid-up life insurance policies or annuities Monthly Monthly Twice a panel Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Twice a panel Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly Monthly
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From page 47... ...
Food stamps Monthly Monthly WIC (women, infants, and children Monthly Monthlya nutrition program) Energy assistance Every 4 most 4-mot total School lunch Every 4 mos.b N.A.
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From page 48... ...
SIPP has also obtained more complete reporting of many types of income than has the March CPS when aggregate amounts from the two surveys are measured against independent sources. For example, average monthly food stamp benefits by quarter reported in the 1984 SIPP panel amounted to 83-90 percent of the corresponding quarterly totals from independent sources, whereas total food stamp benefits in 1983 from the March 1984 CPS amounted to only 71 percent of the annual total from independent sources.
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From page 49... ...
government securities Every 4 most combined combined Municipal or corporate bonds Every 4 most 4-mot total value twice Other interest-earning assets Every 4 mos.J a panela Own Money market funds Every 4 most ~ U.S. government securities Every 4 most ~combined combined Municipal or corporate bonds Every 4 most ~4-mot total value twice Other interest-earning assets Every 4 most, a panela Stocks or mutual fund shares Jointly held with spouse Every 4 most 4-mot total Twice a (cash and reinvested dividends panelb separately; value and debt or margin account separately)
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From page 50... ...
Major differences between the 1990 and earlier panels include: In the 1984-1986 panels, values for almost all assets and liabilities were obtained twice a panel, because the asset and liabilities and real estate and vehicle topical modules were generally asked twice a panel (see Table 3-13)
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From page 51... ...
TABLE 3-3 Nonresponse Rates for Selected SIPP Core Items, by Panel Question 1984 1985 1986 Labor Force Activity Identification of weeks absent without pay 0.1a 0.1 Identification of weeks with a job or lousiness 2.22.0 2.5 Presence of weeks looking or on layoff 1.01.3 2.0 Identification of weeks looking or on layoff 3.22.4 2.9 Income Recipiency or Asset Ownership Social security 0.60.6 1.0 Unemployment compensation 0.10.1 0.2 Food stoops 0.30.4 0.5 Savings accounts 1.00.9 0.9 Shares of stock 1.31.4 1.5 Income Amounts Hourly wage rate 9.510.4 10.8 Monthly wage and salary 6.27.2 8.4 Self-employment salary or draw 14.016.9 14.6 Social security 8.S9.5 10.0 Unemployment compensation 9.19.7 9.9 Food stamps 3.64.1 4.4 Interest 34.629.8 30.8 (24.2)
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From page 52... ...
52 U U et ~ ~ V~ ~ o ~Cl X C o ~ ~ I ,= ~=, ~ ~ ~ ~ ~ ~ ~ ~, ~ ~r~ ~oo ~In _ II ~ ~_ _ _ j = i1 l E)
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From page 53... ...
53 en C)
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From page 54... ...
. Finally, SIPP (as is true of household surveys generally, including the March CPS)
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From page 55... ...
94.5 Federal Supplemental Security Income 3rd quarter 1983 92.0 89.8 84.9 4th quarter 1983 91.3 93.5 1st quarter 1984 94.8 96.4 2nd quarter 1984 98.2 97.4 3rd quarter 1984 98.3 98.6 4th quarter 1984 98.1 99.2 Social security 3rd quarter 1983 99.2 99.6 91.7 4th quarter 1983 96.3 100.6 1st quarter 1984 97.3 100.5 2nd quarter 1984 97.7 101.1 3rd quarter 1984 97.5 101.3 4th quarter 1984 97.5 101.6 Aid to Families with Dependent Childrena 3rd quarter 1983 78.5 76.2 76.0 4th quarter 1983 79.2 78.5 1st quarter 1984 84.5 85.3 2nd quarter 1984 86.0 86.0 3rd quarter 1984 82.0 80.2 4th quarter 1984 80.7 78.8 Food stamps 3rd quarter 1983 89.5 90.1 71.2 4th quarter 1983 91.0 83.1 1st quarter 1984 90.8 85.2 2nd quarter 1984 90.5 86.2 3rd quarter 1984 90.3 84.6 4th quarter 1984 91.7 83.6 Veterans' compensa tion or pensiona 3rd quarter 1983 89.2 78.9 63.3 4th quarter 1983 89.7 79.9 continued on next page
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From page 56... ...
. Second, SIPP needs to have the best possible measures of the extent of program participation and the amount of benefits received in order to support analysis of program participation rates and to compare the characteristics of participants and eligible nonparticipants.
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From page 57... ...
. Finally, the Census Bureau should undertake a thorough reexamination of the procedures that are used to edit program data obtained in SIPP and to impute missing income and asset information for program recipients.
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From page 58... ...
. Finally, the availability of good tax measures will permit analysis of the distribution of the tax burden on families with 6The Census Bureau's "hot-deck" imputation procedures do not take account of poverty or receipt of program benefits in imputing specific income and asset values (although they do take account of income levels in broad terms)
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From page 59... ...
estimated that the individual income tax rate for the bottom onetenth of taxpayers was about 4 percent in 198S, compared with 1 percent in 1966, and that social security payroll taxes had doubled for this group over the same period (although recent tax changes have reduced income taxes for the poor and increased offsetting tax credits)
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From page 60... ...
60 so Ct AS en C)
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From page 61... ...
to pull the tax records of SIPP respondents, clean them in the same manner as is done for the SOI sample, and return the information to the Census Bureau to use in estimating after-tax income. Such an approach would be very powerful in terms of providing accurate tax data, including the filing versus r~onfiling status of all SIPP respondents an important piece of information for tax policy modeling.
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From page 62... ...
Valuation of In-Kind Benefits Still another high-pnonty goal that the Census Bureau staff have set to improve income and related statistics from SIPP, which we endorse, is to develop measures of the value of in-kind benefits.8 Noncash transfers, both 8In-kind benefits are sometimes literally in kind, such as the provision of a public housing unit to a low-income family; more often, they are rendered in the form of coupons (e.g., food stamps) or cash payments to third parties (e.g., reimbursement for heating, child care, or
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From page 63... ...
Some of this increase reflects rising prices for health care services, but there has also been a major expansion in the receipt of health benefits. Privately provided fringe benefits, such as health insurance and pension coverage, also have become much more common, and they are now estimated to represent as much as onefourth of employers' total labor costs (Levitan and Gallo, 1989:14~.
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From page 64... ...
. loin addition to food stamps and public housing, the March CPS expanded income estimates currently include the value of school meals.
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From page 65... ...
, and child care subsidies. 14Wave 6 of the 1984 SIPP panel included a fairly comprehensive module on fringe benefits, but there has been no such module in subsequent panels.
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From page 66... ...
SIPP should support both cross-sectional analyses and longitudinal analyses that examine changes in resources across time as they are associated with changes in other characteristics, such as family composition. The SIPP questionnaire has generally included a wealth of demographic and socioeconomic information: many items are tracked on a monthly basis in the core interviews, and others are asked occasionally in topical modules.
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From page 67... ...
One specific mechanism to achieve flexibility and innovation without unnecessarily disrupting the core survey is to make use of topical modules. In addition to the topical modules in each panel that are open for federal agencies and other outside users to specify questions on topics of emerging policy interest, there could well be another module that is for the use of the Census Bureau analysis staff to develop new measures that relate to the core subjects in SIPP, namely, income and program participation (We explore this idea in the section on topical modules, below.)
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From page 68... ...
Another approach, which is used by the Bureau of the Census (199lb:Appendix B) for the March CPS expanded income estimates, is to impute a rate of return to the estimated amount of home equity.
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From page 69... ...
After imputation for nonresponse, SIPP obtains an estimated 80 percent of the dividend income reported to the IRS (compared with 61% in the March CPS) and an estimated 65 percent of reported interest income (compared with 79% in the March CPS, which uses an improved imputation procedure)
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From page 70... ...
The conclusion that we reach from reviewing the bewildering extent and variable quality of asset data in SIPP is that the Census Bureau should rethink the amount of detail and frequency of collection of asset information from the perspective of its two primary goals. For purposes of assessing program eligibility, the core questions on asset ownership and income flows are needlessly detailed.
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From page 71... ...
One useful strategy may be to focus measurement in the core on those assets that are most relevant for program eligibility and most likely to be held by low-income households, such as checking accounts, regular savings accounts, houses, and cans. Measures of their value could be included in the core questionnaire instead of only once or twice a panel in topical modules.
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From page 72... ...
SIPP has included questions in topical modules about parent- and other kin-provided child care, long-term care providers for respondents age 15 and older, and the time that respondents contribute to assisting people outside their household (see Harpine, McNeil, and Lamas, 1990~. We believe that continued collection of this kind of information, with the frequency determined by agency needs, could be important for many policy purposes.
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From page 73... ...
However, this topic represents a potentially important aspect of income and well-being, and we suggest that the Census Bureau support research on how to measure such items as access to credit,25 with a goal of having an appropriate topical module within a few years. We note in this regard that wave 6 of the 1991 panel and wave 3 of the 1992 panel will include a new module on extended measures of well-being.
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From page 74... ...
, although information on amounts or extent of benefits for most of these programs is obtained on an annual rather than monthly or 4-month basis. Improved Eligibility Measures Although a vast improvement over the March CPS data, SIPP's information on program eligibility has been a relatively weak component of the survey's 26Thus, families with an annual income too high to qualify for means-tested assistance programs may have had periods of sufficiently low income to be eligible for benefits for some months of the year.
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From page 75... ...
, not all needed information was collected for such major programs as AFDC and food stamps. Moreover, the information collected was scattered throughout several topical modules, so that an analyst had to merge files for several waves and assume that information from different interviews was contemporaneous (although, in fact, the information from one wave on, say, child care expenses might not apply to the family situation at a different wave)
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From page 76... ...
be scaled back in favor of obtaining more frequent valuations of asset types that are important for program eligibility. Spell Information For analysis of programs as well as income distnbution, a major focus of policy interest is in time-genes statistics for such periods as months, quarters, and years.
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From page 77... ...
; rather, SIPP was designed to provide more detailed information on short spells of program participation and poverty, including spells of less than a year, which the longer term panel surveys do not measure well because their interviews occur at annual or biennial intervals.3~ However, we believe that SIPP can and should improve the data that it provides for analysis of program eligibility and participation spells over the short to medium term. Such data are needed to respond to the growing policy concern about welfare dependency and the interest in reforming welfare programs so as to lessen dependency.
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From page 78... ...
Finally, we believe it is important for SIPP to obtain some information about respondents' program participation histories prior to the first interview for example, whether a current spell of participation as of wave 1 is the first or a repeat spell and the beginning date of the first spell. This type of information is needed to analyze long-term welfare participation, including multiple spells.
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From page 79... ...
Respondents appeared to correctly distinguish the question on the beginning date of the current spell of receipt from that on the beginning date of the first spell. Miller and Martini suggested wording changes to further improve the quality of the data, which the Census Bureau incorporated into the questionnaire for the 1992 panel.33 We encourage the Census Bureau to continue to evaluate and seek ways to improve the recipiency history information in SIPP, which can increase the usefulness of the survey for analyses of longer term program participation.
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From page 80... ...
TOPICAL MODULES The use of SIPP as a vehicle to respond to social welfare policy concerns in areas that are related to the survey's core subjects is an important goal. Indeed, the data from topical modules have proven very popular with a wide range of users; see Table 3-13 for a listing of topical modules included in SIPP panels to date.
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From page 81... ...
Energy usage 4 6 3 Personal history Education and training 2 2 2 2 2 Education and work 3 Employment 2 2 2 2 2 Family background 2 2 2 Fertility 8 4 2 2 2 2 2 Household relationships 8 4 2 2 2 2 2 Marital status 8 4 2 2 2 2 2 Migration 8 4 2 2 2 2 2 Recipiencyd 5 2 2 2 2 2 Work disability 2 2 2 2 2 Wealth Assets and liabilities 4,7 3,7 4,7 4 4 Real estate property 7 3,7 4,7 4 4 and vehicles Pension plan coverage 4,7e 7 4,7e 4 and retirement expectations 5,8 continued on next page
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From page 82... ...
are included in waves 3 and 6, while "fixed" modules (e.g., annual income and retirement accounts, income taxes, educational financing and enrollment, and the program eligibility, personal history, and wealth sets of modules) appear in other waves (see Committee on National Statistics, 1989:Tables 2-2, 2-3, for identification of fixed versus variable topical modules in the 1984-1990 panels)
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From page 83... ...
will make it possible to include topical modules for this purpose without sacrificing existing modules. Thus, under our proposed design of 12 interviews per panel, one possible sequencing of topical modules that leaves room for a Census Bureau module in addition to variable modules for policy needs is as follows: wave 1, recipiency and employment history wave 2, other personal history modules wave 3, wealth modules wave 4, open wave 5, annual income and taxes wave 6, open wave 7, open wave 8, annual income and taxes wave 9, wealth modules wave 10, open wave 11, annual income and taxes wave 12, open This scheme obtains personal history information early in the life of a panel, provides measures of balance sheets twice per panel and measures of 38We note that Statistics Canada is designing a new longitudinal Survey of Labour and Income Dynamics for which the agency has invited academic researchers to specify the content of topical modules.
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From page 84... ...
Recommendahon 3-5: The topical module component of SIPP should continued and be strengthened by: · obtaining input from both government agencies and the so cial science research community about topics related to SIPP's core goals to consider for modules; · streamlining the content development process so that timely information can be collected on emerging policy and research issues; and · using some topical modules as a means for the Census Bureau's analysis staff to conduct research on expanded and alternative measures of income and programs. 39The wealth modules scheduled for these waves already include many of the program eligibility questions; it would simply be necessary to add the non-asset-related items (i.e., expenses and disability see Table 3-13)
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From page 85... ...
Moreover, technological developments in data collection and processingspecifically, the use of computer-assisted interviewing and an improved database management system (see Chapter 5) would make it possible to process SIPP data on as timely a basis as the March CPS and make the SIPP data files more accessible.40 Hence, we urge the Census Bureau to set a target date-perhaps the year 2000, certainly no later than the year 2005 for the data from SIPP to be of sufficient reliability, quality, and timeliness to be used instead of the March CPS data as the basis for annual (and other)
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From page 86... ...
Moreover, if SIPP is to be the prime income survey, it does not make sense for the Census Bureau to use scarce resources to develop extensive SIPP-based adjustments to March CPS measures. Furthermore, we believe SIPP should receive priority over the March CPS for major investments designed to improve measures of income and program participation.
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From page 87... ...
Recommendation 3-6: SIPP should become, over time, the primary source of the nation's income statistics in place of the March CPS income supplement. SIPP should receive priority for major investments to develop improved income measures.
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From page 88... ...
SIPP is particularly well positioned to exploit administrative records because of its focus on income and program participation, for which many relevant public and private record systems exist. We see several ways in which administrative records may be of great benefit to SIPP.
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From page 89... ...
to provide access to linked files. The second possible type of use for administrative records in SIPP is as the basis for multiple-frame samples for SIPP panels, that is, area probability samples of households together with cases that are drawn from one or more type of administrative record (e.g., program records, tax records, or employer records)
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From page 90... ...
are currently conducting matches of IRS records with the 1990 SIPP panel as part of their work to evaluate income data in SIPP and the March CPS and to develop a model for estimating after-tax income from SIPP.45 Forward record-check studies involve selecting samples from administrative records and giving the selected individuals the survey interviews. Such studies are more limited than full record checks in that they do not pennit false negatives to be identified; however, forward record checks can be earned out on a more timely basis because there is no need to match administrative and survey records.
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