Volume 33, Number 2 (Spring) 1998: Attrition in Longitudinal Surveys

Fitzgerald, John, Gottschalk, Peter, and Robert Moffit. 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics." Journal of Human Resources 33(2):251-299.

By 1989 the Michigan Panel Study on Income Dynamics (PSID) had experienced approximately 50 percent sample loss from cumulative attrition from its initial 1968 membership. We study the effect of this attrition on the unconditional distributions of several socioeconomic variables and on the estimates of several sets of regression coefficients. We provide a statistical framework for conducting tests for attrition bias that draws a sharp distinction between selection on unobservables and on observables and that shows that weighted least squares can generate consistent parameter estimates when selection is based on observables, even when they are endogenous. Our empirical analysis shows that attrition is highly selective and is concentrated among lower socioeconomic status individuals. We also show that attrition is concentrated among those with more unstable
earnings, marriage, and migration histories. Nevertheless, we find that these variables explain very little of the attrition in the sample, and that the selection that occurs is moderated by regression-to-the-mean effects
from selection on transitory components that fade over time. Consequently, despite the large amount of attrition, we find no strong evidence that attrition has seriously distorted the representativeness of the PSID through 1989, and considerable evidence that its cross-sectional representativeness has remained roughly intact.

John Fitzgerald is a professor of economics at Bowdoin College. Peter Gottschalk is a professor of economics at Boston College. Robert Moffitt is a professor of'economics at Johns Hopkins Univervity. This research was supported bv the National Science Foundation through a grant to the PSID Board of Overseers. The authors wish to thank Joseph Altonji, Greg Duncan, Guido Imbens, Charles Manski, Gert Ridder, Gary Solon, Jeffrey Wooldridge, and three anonymous referees for comments on various drafts as well as seminar participants at Berkeley, Michigan State, NYU, Princeton, Stanford, and the University of Wisconsin. Excellent research assistance was provided by Robert Reville, Lisa Tichy, and Thomas Vanderveen.