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Learn about wage data questionnaire, methods for imputing wages, specialist replacement, quality adjustment, and tax considerations in NTA research. Explore different wage types, coding schemes, and adjustments.
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Imputing Wages to Activities Gretchen Donehower NTA Time Use and Gender Workshop Tuesday, October 23, 2012 Facultad de Ciencias Sociales, Universidad de la República Montevideo, Uruguay
Outline • Wage Data Questionnaire • Methods for Imputing Wages • Why NTTA uses Specialist Replacement Method • Which wages to use for which activities? • Quality Adjustment • Taxes and Other Adjustments
Wage Data Questionnaire • What type of wage data is available for you to use? • What is the coding scheme for different jobs or occupations? • Is the data pre-tax or post-tax? • Do the wages include fringe benefits or employer-paid taxes?
Methods for Imputing Wages • Different methods for different types of research questions • Replacement method: what would you have to pay to buy the service in the market? • Can replace with generalist or specialist wages • Opportunity cost method: what could you earn with your time in the market if you worked for pay instead of doing the household activity? • NTTA uses specialist replacement
Why use specialist replacement? • NTA is mostly concerned with accounting type questions, not behavioral models or individual incentives • Opportunity cost analyses sometimes come up with values of household production that are so large that no one pays attention • Reveals the limitations of the behavioral model and measurement issues with opportunity cost method
Which Wages to Use? • Country teams must decide what is appropriate in their context • Can use single occupation or average of different occupations • Use employment-weighted averages to reflect the distribution of occupation types in the market • US, 2009 example:
Quality Adjustment • Reflects difference in productivity between the market and household for some activities • Different availability of capital (physical and human) • Efficiencies in the market from specialization • Some activities need this adjustment, others do not • Would like to add an age-productivity adjustment, but have not figured out how
Taxes and Other Adjustments • Pre-tax or post-tax? • Adjustment for supplements to wages • In some countries, supplements to wages and salaries are a large part of total market labor income (mandatory employer taxes, fringe benefits) • We want our replacement method to reflect costs in the market, so need to increase wages to reflect this additional replacement expense • So, adjust imputed wage ratio of supplements to total wages and salaries from national accounts (i.e. multiply by 1+[supplements to wages and salaries / wages and salaries])