Hi, I am new to CPS data. I am working with income and earnings data in CPS, and looking at two variables INCWAGE and INCLONGJ. My understanding is that INCLONGJ is a component of INCWAGE and that INCLONGJ <= INCWAGE, but I see that this is not true in the CPS ASEC 2024 data. Could someone kindly explain why this might be the case?
. assert incwage>= inclongj
4,051 contradictions in 144,265 observations
assertion is false
INCWAGE reports wage and salary income, which includes OINCWAGE, and for some respondents also includes INCLONGJ. iNCLONGJ reports the earnings from the respondent’s longest held job in the previous year. OINCWAGE reports the earnings from the respondent’s other jobs (if there were any other jobs) in the previous year.
OINCWAGE is always included in INCWAGE. As stated in the description of INCWAGE, INCLONGJ is only included in the calculation of INCWAGE when the source of the wages reported in INCLONGJ are from wage and salary income. If the earnings reported in INCLONGJ are from self-employment income, then they are not included in INCWAGE. The variable SRCEARN reports the source of the earnings in INCLONGJ. If SRCEARN=2 (self employment) or 3 (farm self employment), this indicates that INCLONGJ is not a component of INCWAGE.
In the 2024 ASEC, there are 4,051 respondents with INCLONGJ>INCWAGE. In all of these cases, the respondent’s value of SRCEARN is either 2 (self employment) or 3 (farm self employment). Since their INCLONGJ earnings are from self employment, they are not a component of INCWAGE. Therefore, INCLONGJ may be greater than INCWAGE for these individuals.
This was helpful, thank you so much!