Imputation and Editing of Income from the Administrative File in Israel

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Imputation and Editing of Income from the
Administrative File in Israels Censuses
prepared by Orly Furman and Dmitri Romanov

• UNITED NATIONS
• ECONOMIC COMMISSION FOR EUROPE
• CONFERENCE OF EUROPEAN STATISTICIANS
• Work Session on Statistical Data Editing
• Ljubljana, May 2011

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Use of Administrative Income Files in Israels
Censuses
2008 Census 1995 Census
Employment Employment Salary and self-employment income (net and gross) Questionnaire
December 2008 Calendar year 2008 September 1995 Reference period
Imputation of salary and self-employment income for all records Consistency checks of reportage on employment Consistency checks of reportage on salary Imputation of 8.6 records when data missing Administrative income files
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Administrative Income File used in the 1995
Census

• Source National Insurance Institute.
• Coverage 1.965 million employee posts, months of
  work and annual salary and wage of 1.815 million
  employees, as reported to the NII.

Diff. census-adm. file for the census sample, Reported by the 20 census sample Adm. file for the 20 census sample Adm. file
-16.5 3,978 4,763 4,706 Average wage, NIS
-8.1 1,566.5 1,705.0 1,815.1 Emplyees, 000
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Amendments to the Salary Data in the 1995 Census
Percentage of total Treatment/amendment
69.0 Non-amended value
21.0 Gross salary imputed by regression from net salary
8.6 Imputation of data from adm. file
1.2 Editing of irregularities (division by 100/10)
0.2 Other editing
100.0 Total
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Reporting Salary in Census Rounding
Distribution of September Salary Reported in the
Census
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Reporting Salary in Census Confounding Net and
Gross
Deviation of the September Salary Reported in the
Census from the Gross and Net Monthly Salary Per
Job in the Administrative File, by Annual Salary
Percentiles, as a percentage of gross calculated
salary
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Imputing Salary in Census Challenge of Multiple
Jobs
Distribution of Values Imputed on the Basis of
the Administrative File for Employees who Held
One Job (Left) and More Then One Job (Right) in
1995
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Administrative Income Files Used in the 2008
Census

• Source Tax Authority.
• Coverage employee posts, months of work and
  annual salary and wage of the employees, and
  business income of the self-employed individuals.
• Usage Imputation of earnings (salary and
  business income of the self-employed),
  conditional on workforce status as reported in
  the Census and occurrence in the administrative
  income files.
• Challenge Treatment of inconsistencies between
  the two sources, due to misreporting in the
  Census, or/and omissions of the administrative
  file.

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Identification of Cases in Which the Census Data
and the Administrative Data do Not Coincide
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Discrepancies between the Census Data and the
Administrative Data

• Group A Individuals that were found to have work
  income in 2008 as per the administrative income
  data base, which according to the census did not
  belong to the annual workforce.
• Group B Individuals that reported in the census
  as belonging to the annual workforce, but were
  not found to have work income according to the
  administrative data bases.

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Analysis of Cases in Group A

• 67 of individuals in this group are in the
  primary working age-group (19 to 65). 51 worked
  in 2008, according to the income tax data, less
  than half a year. This reinforces the hypothesis
  that under-reporting of employment in the Census
  is connected to irregular employment over the
  year.
• For 43 of this group, a record exists in the
  administrative income data base for December
  2008.
• 74 of the individuals having work income in
  December, who did not report employment in the
  census, were in in the primary working age-group
  For two thirds of them the income data base
  includes information on ongoing employment in
  2008, for over six months of employment. This
  indicates a high probability of inaccurate
  reporting in the census with respect to labour
  market non-participation.

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Analysis of Cases in Group B
Absent from the income data base, of cell Distribution as reported in the census Work status
12.3 100.0 Total
10.7 86.3 Employees
16.5 8.3 Self employed not employing
12.7 4.4 Self employed employing
25.6 0.1 Cooperative members
75.6 0.8 Kibbutz members
51.2 0.1 Unpaid family members
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Analysis of Cases in Group B
Absent from the income data base, of cell Distribution as reported in the census Work status
12.3 100.0 Total
10.7 86.3 Employees
16.5 8.3 Self employed not employing
12.7 4.4 Self employed employing
25.6 0.1 Cooperative members
75.6 0.8 Kibbutz members
51.2 0.1 Unpaid family members
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Analysis of Cases in Group B

• The work hypothesis is that the absence of
  information on employees and the self-employed is
  due to late or failed reporting by employers and
  self employed individuals to the income tax
  authority.
• Accordingly, the employer of an employee who was
  absent from the 2008 income data base should be
  examined, to check whether the employee was
  active in the preceding year.
• The examination shows that more than 50 worked
  in 2007 and have employee jobs. 80 of these work
  for employers that did not report in 2008 but did
  report in 2007.

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Algorithm of Income Imputation
of cases reported in census of total imputed cases Income recording method Group
7.9 61.7 Work months and salary imputed as per the income data base. Found to have work income according to income data base but do not belong to the workforce according to the census.
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Algorithm of Income Imputation (cont.)
of cases reported in census of total imputed cases Income recording method Group
1.9 15.2 The individuals salary for 2007 was imputed, adjusted for the average salary increase in the economic industry. Belong to the workforce according to the census but found not having work income according to the income data base, found to be employed by employers in 2007 that did not report in 2008
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Algorithm of Income Imputation (cont.)
of cases reported in census of total imputed cases Income recording method Group
0.3 2.6 Income was imputed for holders of active files in 2007, adjusted for the average income increase in the economic industry. Belong to the workforce according to the census but found not having work income according to the income data base, found to be reporting self employed individuals in 2007 who did not report in 2008
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Algorithm of Income Imputation (cont.)
of cases reported in census of total imputed cases Income recording method Group
0.5 3.6 Income was imputed from the ongoing survey, according to the average income as per defined estimation cells. Belong to the workforce according to the census but found not having work income according to the income data base, military personnel, housekeepers, caretakers and unknown denotation of occupation
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Algorithm of Income Imputation (cont.)
of cases reported in census of total imputed cases Income recording method Group
2.1 16.9 Income was imputed based on average income in the defined estimation cells, according to the number of months worked as reported in the census. Individuals who reported having worked in the census but do not belong to the abovementioned groups
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The Bottom Line

• All in all, only in 12.7 of cases that reported
  employment in the 2008 census discrepancies
  between the reportage and the administrative
  source were treated, and income information from
  the administrative file was amended. In 87.3 the
  data on earnings of the employees and the
  self-employed from the administrative file was
  imputed.
• In contrast, income data as reported in the
  traditional 1995 census, had to be amended or
  imputed in 29.6 of cases.

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Thank you!