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Strategies for Imputing Wages to Activities

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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Strategies for Imputing Wages to Activities

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  1. 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

  2. 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

  3. 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?

  4. 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

  5. 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

  6. 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:

  7. 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

  8. 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])

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