The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences
Bruce D. Meyer
Wallace K. C. Mok
James X. Sullivan
High rates of understatement are found for many government transfer programs and in many datasets. This understatement has major implications for our understanding of economic well-being and the effects of transfer programs. We provide estimates of the extent of under-reporting for ten transfer programs in five major nationally representative surveys by comparing reported weighted totals for these programs with totals obtained from government agencies. We also examine imputation procedures and rates. We find increasing under-reporting and imputation over time and sharp differences across programs and surveys. We explore reasons for under-reporting and how under-reporting biases existing studies and suggest corrections.
Benefit receipt in major household surveys is often under-reported. In recent years, as many as half of the dollars received through Food Stamps, Temporary Assistance for Needy Families (TANF) and Workers’ Compensation has not been reported in the Current Population Survey (CPS). High rates of understatement are found for many other government transfer programs and in datasets such as the Survey of Income and Program Participation (SIPP) and the Panel Study of Income Dynamics (PSID). These datasets are among our most important for analyzing incomes and their distribution as well as transfer receipt. Thus, this understatement has major implications for our understanding of the economic circumstances of the population and the working of government programs. We provide estimates of the extent of transfer underreporting for ten of the main transfer programs and five major nationally representative household surveys. We obtain estimates by comparing weighted totals reported by households for these programs with those obtained from government agencies. We also examine imputation procedures and the share of reported benefits that are imputed. Our results show increases in under-reporting and imputation over time and sharp differences across programs and surveys. These differences shed light on the relative importance of the various reasons for underreporting.
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