Potential inconsistency between INCWAGE and EMPSTAT


I am working with IPUMS 1-year samples for 1940,1950,1960,…,2020 (every 10 years) and something caught my attention: I am restricting to people between 31 and 40 years old and looking at their wages and employment status. I am confused as to why there are some (208,277/5,022,706, so around 5%) of observations that report positive INCWAGE (INCWAGE > 0), but report not being in the labor force? (EMPSTAT = 3).

Could this be because EMPSTAT refers to their current employment status, while INCWAGE refers to wages over the past 12 months? So essentially what this is telling me is that around 5% of people in my sample who reported positive wages in the past 12 months, are now outside of the labor force? Does this seem reasonable? Or is there something I am misunderstanding?

Thanks in advance for your help!

The universe of the variable INCWAGE is all persons age 14+ or all persons age 16+, depending on the sample. INCWAGE reports each respondent’s total pe-tax wage and salary income for the previous year (see questionnaire text). You are correct that individuals who were unemployed or not in the labor force (as reported in EMPSTAT) in the reference period for the EMPSTAT question (which, as you can see in the questionnaire text, is usually the week prior to the survey) may still have had some wage or salary income in the previous year, and therefore have non-zero values of INCWAGE. You can see in the WORKEDYR variable, which reports whether a respondent worked in the last year, that respondents with non-zero INCWAGE values who are unemployed or not in the labor force according to EMPSTAT all worked in the last year.