Measuring employment in panel surveys: A comparison of reliability estimates in HILDA and BHPS

SC Noah Uhrig, Institute for Social and Economic Research

SC Noah Uhrig

Co Authors
Nicole Watson

An important use of large household panel surveys is an examination of inequality dynamics in society. An example might be how research on discrimination in employment focuses on sex or race differences in wages, job quality, mobility chances or status outcomes. A well known problem, however, is how random measurement error can lead to attenuation bias in observed substantive coefficients. Moreover, there is mixed evidence on how panel conditioning might affect measures as panels age. One approach to assessing changing data quality in a panel context is to estimate the reliability of variables using quasi-simplex Markov models initially formulated by Heise (1969) and Wiley and Wiley (1970). This approach relies on panel data with at least three time-points to estimate reliabilities from a measurement model incorporating latent true values. Comparing data from the Household, Income and Labour Dynamics in Australia Survey and the British Household Panel Survey, our research addresses the questions of whether and under what conditions the reliability of core employment measures change over time. We further examine whether change in reliability is related to a number of covariates including sex, age and education. We conclude with a discussion of how reliability assessments may affect substantive research using panel data, including cross-country comparisons, and whether calculating and publishing reliabilities may be a desirable feature of a panel data quality profiling exercise.