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Survey of Income and Program Participation (SIPP) Data
The concepts used in the SIPP and the March supplement to the Current Population Survey (CPS) differ in some regards. These differences occur primarily between components of the income definition used in each survey and the manner in which certain reference units are categorized. An explanation of these differences follows.
Two basic units of reference common to both the SIPP and CPS are people and households. Groups of people living together, when combined based on relationship, form family units. A family refers to a group of two or more people related by birth, marriage, or adoption who reside together (one of whom is the householder). Two or more people who live together and are related to one another, but not related to the householder, form an unrelated subfamily. People in unrelated subfamilies are not included in the count of family members in the CPS, but are included as family members for the SIPP.
A unique feature of a longitudinal survey, such as SIPP, is its ability to capture change over time. A cross-sectional survey, such as CPS, does not have this feature and can only provide a series of snapshots of the socio-economic conditions that exist at different fixed points in time. CPS data are based on the demographic characteristics as they existed at the time the survey was conducted and are applied to the economic characteristics that existed for the previous calendar year. The demographic data in the SIPP are collected with the economic data throughout the calendar year and are likely to have changed during the year. In order to incorporate the effect of changes over time in family compositions in measures of SIPP income data, the data are presented for people rather than families. People are characterized by the income of their respective family unit based on living arrangements each month during the calendar year.
The definition of income used in the SIPP is basically the same as in the CPS. It reflects money income before taxes and does not include the value of noncash benefits such as employer-provided health insurance, food stamps, or medicaid. Differences do exist however, they are:
For an overview of the SIPP and a detailed explanation of the concepts used in that survey, see Current Population Reports, Series P70, No. 24, Transitions in Income and Poverty Status: 1987-88.
Bureau of Economic Analysis (BEA) Personal Income Series
The income data presented in CPS reports are not directly comparable with estimates of aggregate personal income prepared by the Bureau of Economic Analysis, Department of Commerce, nor with the distributions of families and unrelated individuals by family personal income brackets published by that Bureau between the years 1929 to 1963. The lack of correspondence stems from the following differences in definition and coverage:
1. Income definition. The table below shows an overview of the income sources included in the BEA Personal Income Series and the Census Bureau Money Income Series.
Table 1. Overview of Income Concepts: National Income and Product Accounts Personal Income and Household Survey Money Income
|Sources of Income In Both Personal Income and Money Income||In Personal Income but not Money Income||In Money Income but not Personal Income|
|1||Wages||employer-provided food and lodging|
|2||Farm and nonfarm
capital consumption adjustments
inventory valuation adjustment
defaulter's gain and bad debt expense
income of cooperatives
farm products consumed on farm
change in farm inventories
interest received by farm corporations
|patronage dividends from
interest on life insurance
interest on private pension plans
value of free financial services
interest received by fiduciaries and nonprofits
unredeemed interest on US savings bonds
IRA and Keogh dividends
dividends received by fiduciaries and nonprofits
small business corporation income
|5||Rent and royalties||
rental value of owner-occupied housing
rent received by fiduciaries and nonprofits
capital consumption adjustment
|6||Social Security and Railroad Retirement|
|7||Federal and state Supplemental Security Income|
|8||Family assistance||adoption assistance|
|9||Other cash welfare|
|10||Federal and state unemployment compensation||employer contributions to private supplemental unemployment compensation funds||
benefits from private
supplemental unemployment compensation funds /2
|11||Federal and state worker's compensation||employer contributions to private worker's compensation funds||benefits from private worker's compensation funds /2|
|13||[Private pensions] /1||employer contributions to private pension and profit-sharing funds||benefits from private pension and profit-sharing funds /2|
|14||Federal employee pensions|
|16||State and local government employee pensions|
|Estates and trusts|
|Foster child care payments|
|federal hospital and medical insurance benefits||cash benefits from accident and disability insurance|
|state public assistance medical care||state temporary sickness or disability insurance payments|
|pension benefit guaranty||payments from annuities and paid-up life insurance|
|food stamps||draw or regular payments from IRA or Keogh|
|direct relief||child support|
|earned income tax credit||alimony|
|energy assistance||assistance from friends and relatives|
|business transfer payments to persons||other cash income|
|lump sum payments||personal contributions to social insurance|
2. Source of data. The personal income series is estimated largely on the basis of data derived from business and governmental sources. These sources include the industrial and population censuses, employer's wage reports under the Social Security programs, and records of disbursements to individuals by governmental agencies. The income data presented in the census reports, on the other hand are based directly on field surveys of households.
Income data obtained in household interviews are subject to various types of reporting errors which tend to produce an understatement of income. For more information on this subject, see Current Population Reports, Series P60-206, Appendix E, which may be accessed on this Web site. It is estimated that the income surveys conducted by the Census Bureau during the past few years have obtained about 89 percent of the comparable total money income aggregates and about 99 percent of the comparable money wage or salary aggregates derived from the personal income series prepared by BEA.
For a more detailed discussion of the differences between distributions using Census money income and BEA personal income, see Size Distribution of Family Personal Income: Methodology and Estimates for 1964, by Edward C. Budd, Daniel B. Radner, and John C. Hinrichs, Bureau of Economic Analysis, BEA-SP 7321, June 1973.
3. Population coverage. The table below shows the differences between the population universes for the Census Bureau Money Income Series and BEA's Personal Income Series.
Table 2. Overview of Population Universes: Bureau of Economic Analysis Personal Income and Census Bureau Money Income
|Populations Covered in Both Personal Income and Money Income||In Personal Income but not Money Income||In Money Income but not Personal Income|
|Civilian noninstitutionalized||institutionalized decedents overseas military on US post without family children emigrants||foreign professional and migratory workers|
4. Average Income. The average income figures (e.g., for geographical regions) represent income per capita, i.e., they were derived by dividing total income by the total population including men, women, and children. Most of the Census averages, in contrast, are for households, families, unrelated individuals, or income recipients 15 years old and over.
Department of Agriculture Farm Income Series
The farm income data are not directly comparable to that published by the U.S. Department of Agriculture (USDA) for several reasons. The USDA publishes two major series on income of farms: (1) net farm income and (2) net cash farm income.
For reasons listed below, the estimates of farm self-employment income per person or per family as published by the Census Bureau differ from estimates of operators' net farm income or net cash farm income per farm as published by the Department of Agriculture:
The estimates of the USDA differ from the estimates of the Census Bureau methodologically as well as conceptually. The USDA estimates are based on data derived from the Census of Agriculture, farm surveys, business, and governmental sources, and are not available at a farm or household level, while the Census Bureau estimates are compiled from data collected in sample surveys. The latter estimates are subject not only to sampling variation but also to errors of response and nonreporting.
For a more detailed discussion of the concepts and methodology used in the USDA estimates, see U.S. Department of Agriculture Handbook No. 365, Major Statistical Series of the U.S. Department of Agriculture, Vol. 3, Gross and Net Farm Income, September 1969.
Federal Income Tax Data
For several reasons, the income data published by the Census Bureau are not directly comparable with those which may be obtained from statistical summaries of income tax returns. Income, as defined for tax purposes, differs somewhat from the concept used by the Census Bureau. For example, certain types of receipts, such as veterans' payments, SSI, and TANF (formerly known as AFDC), are not reported on Federal tax returns. Moreover, the coverage of income tax statistics is less inclusive because many people with low incomes are not required to file tax returns. Furthermore, some income tax returns are filed as separate returns and others as joint returns; consequently, the income reporting unit is not consistently either a family or a person.
Old-Age, Survivors', Disability, and Health Insurance earnings record data. Data shown in Census Bureau reports and the distributions made upon the basis of Old-Age, survivors', Disability, and Health Insurance earnings record data differ for the reasons listed below.
The wording in this document is revised from that published in P60, No. 184. We updated this section to replace passive voice with active voice; replaced "persons" with "people"; "Bureau of the Census" with "Census Bureau"; and changed "AFDC" to "TANF".