Thursday, Aug 7: 8:30 AM - 10:20 AM
0604
Topic-Contributed Paper Session
Music City Center
Room: CC-106B
Information on households' income, consumption and wealth is critical for a variety of policy purposes, for understanding inequality and other aspects of well-being, and for research on many aspects of economic behavior. For at least the past 40 years, there has been a growing great need for detailed and reliable micro data for these purposes. Federal agencies—including the Census Bureau, the Bureau of Labor Statistics, the Bureau of Economic Analysis, the Federal Reserve Board, and others—are often seen as the primary sources of such data. However, there are differences across sources in definitions, the extent of comparable coverage of content in all three areas, the representation of the upper tail of these highly skewed variables, the frequency of data series, and many other factors. Moreover, it is difficult, at best, to link such data across sources to address shortcomings in any one set of data. Recognizing the data needs and the current difficulties of serving those needs, the Committee on National Statistics (CNSTAT) of the National Academy of Sciences, Engineering and Medicine assembled an expert panel to chart a way forward. The resulting consensus report from the group, "Creating an Integrated System of Data and Statistics on Household Income, Consumption and Wealth: Time to Build" was issued in 2024. The report proposes to build on the existing work in government agencies, within a framework that would promote deeper collaboration and consistency in moving toward the goal of creating analytically useful information on the joint distribution of income, consumption and wealth. As discussed in the report, there is potential for linking (existing or new) surveys, a variety of sources of state and federal government administrative, and commercial other types of private data.
The presenters for the session include three of the committee members who produced the report. The discussant is a government official who has the knowledge and insight to address the ways in which government agencies may understand and react to the goals and proposed methods described in the report.
Measurement for the 21st Century
Income, wealth and consumption
Interagency collaboration
Government statistics
Applied
Yes
Main Sponsor
Government Statistics Section
Co Sponsors
Business and Economic Statistics Section
Survey Research Methods Section
Presentations
Creating an integrated system of income, consumption, and wealth data is complex, but not impossible. Building on the recommendations in the NASEM report, I will discuss best practices in data linkage and privacy enhancing technologies that inform the project, noting the challenges and opportunities of blending population-level administrative and commercial data with survey and census data. To join restricted data from multiple government sources, privacy preserving record linkage methods and private set intersections can reduce the need for agencies to yield control over their datasets. The resulting blended data must comply with access and use restrictions for all input sources. This requires careful planning and oversight of data management, planned access modes, and allowable uses. Robust metadata is essential, noting provenance of administrative and commercial data, with documentation about derived elements for responsible research on this powerful new data system. Privacy risks can be mitigated through use of methods including synthetic data, query servers, noise infusion, and enclave access for approved, vetted users. I will describe options for tiered access, ranging from open data to restricted microdata, that align with the needs, timelines, and skillsets of approved users who need reliable estimates of income, consumption, and wealth.
Increasing income and wealth inequality has characterized the U.S. economy for several decades. While researchers differ on the extent of the increase and its causes, they no longer disagree on the essential phenomenon. Yet the nation's disparate federal statistics make it difficult to accurately measure income and wealth inequality and other aspects of economic well-being for the nation's households and families. The Committee on National Statistics (CNSTAT) of the National Academies of Sciences, Engineering, and Medicine released a consensus panel report, Creating an Integrated System of Data and Statistics on Household Income, Consumption and Wealth: Time to Build, that discusses the research and policy needs for new statistics on the distribution of income, consumption and wealth. The report provides guidance on the appropriate definitions of household, family, and individual income, consumption, and wealth, variations in definitions that would be useful for particular purposes, and comparability with commonly used international measures. The report highlights the potential for using multiple data sources, including surveys, tax records, state and federal administrative records, and commercial data. Finally, the documents the legal and administrative barriers to creating an integrated data infrastructure.
Building on the National Academies of Sciences report, Creating an Integrated System of Data and Statistics on Household Income, Consumption and Wealth: Time to Build, we review the major income, consumption, and wealth statistics currently produced by U.S. statistical agencies, and provides guidance for modernizing the information to better inform policy and research (such as understanding trends in inequality and mobility). We demonstrate the progress that has been made by the agencies in improving statistics on the distributions of personal income and personal consumption expenditures and the distributional financial accounts. We document the importance of blending multiple data sources, including surveys, state and federal administrative records, and commercial data, and present alternative methods to produce an integrated data system, and discuss the important blended data products to estimates after tax and transfer income at the Census Bureau. We further discuss pilot studies that are building blended data using tax records, survey data, and building consumption from income and savings using the budget identity. Finally, we provide examples of agency efforts to create joint distributions of income, consumption and wealth, and how these data can be used in research and policy.
Co-Author
David Johnson, National Academies of Sciences, Engineering and Medicine
Speaker
David Johnson, National Academies of Sciences, Engineering and Medicine
We examine income and consumption-based measures of well-being and are the first to conduct such analyses using linked expenditure and administrative income data. Our income measures relying on combined, or "blended", survey and administrative data compare much more closely to those of expenditure measures. This is especially true for the very bottom of the distribution, where prior research has revealed concerns about the underreporting of survey income. Blended income deep poverty tends to be very close to consumption-based deep poverty measures, closing almost all of the existing gap in deep poverty rates measured using survey-reported income and consumption.