The Role of CPS Nonresponse in the Measurement of Poverty

The Current Population Survey Annual Social and Economic Supplement (CPS ASEC) serves as the data source for official income, poverty, and inequality statistics in the United States. There is a concern that the rise in nonresponse to earnings questions could deteriorate data quality and distort estimates of these important metrics. We use a dataset of internal ASEC records matched to Social Security Detailed Earnings Records (DER) to study the impact of earnings nonresponse on estimates of poverty from 1997-2008. Our analysis does not treat the administrative data as the truth'; instead, we rely on information from both administrative and survey data. We compare a full response poverty rate that assumes all ASEC respondents provided earnings data to the official poverty rate to gauge the nonresponse bias. On average, we find the nonresponse bias is about 1.0 percentage point.