Abstract
This paper details efforts to link administrative records from the Internal Revenue Service (IRS) to American Community Survey (ACS) and 2010 Census microdata for the study of migration among foreign-born and native-born populations in the United States. Specifically, we (1) document our linkage strategy and methodology for inferring migration in IRS records; (2) model selection into and survival across IRS records to determine suitability for research applications; and (3) gauge the efficacy of the IRS records by demonstrating how they can be used to validate and potentially improve migration responses for native-born and foreign-born respondents in ACS microdata. Our results show little evidence of selection or survival bias in the IRS records, suggesting broad generalizability to the nation as a whole. Moreover, we find that the combined IRS 1040, 1099, and W2 records may provide important information on populations, such as the foreign-born, that may be difficult to reach with traditional Census Bureau surveys. Finally, the results of our comparison of IRS and ACS migration responses show that IRS records may be useful in improving ACS migration measurement for respondents whose migration response is proxy, allocated, or imputed. Taking these results together, we discuss the potential application of our longitudinal IRS dataset to innovations in migration research on both the native-born and foreign-born populations of the United States.
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Notes
A tool for determining whether filing is required can be found at https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return. Note that, though income verification requirements may vary from state to state, filing is not typically a requirement for enrollment in government benefits programs.
One important exception here is the Earned Income Tax Credit (EITC; see https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit), which may be claimed by low to moderate income workers even if they owe no taxes and/or are not required to file. The EITC is one of the largest anti-poverty programs in the United States as judged by total benefits received: over 27 million workers—roughly 80 percent of those EITC eligible—received $65 billion in fiscal year 2017 (see https://www.eitc.irs.gov/eitc-central/about-eitc/about-eitc).
Access to these sensitive administrative records sources was granted by the Internal Revenue Service and U.S. Census Bureau under the authority of Title 13 and Title 26 of U.S. Code and following research approval at the Center for Administrative Records Research and Applications at the Census Bureau. Given confidentiality concerns, data used in this analysis are not available for public use.
Most married couples choose to file joint rather than individual tax returns. While electing to do so can reduce tax burdens and increase tax returns, married individuals are often required to file jointly to claim benefits such as the Earned Income Tax Credit (see https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-earned-income-tax-credit-questions-and-answers#Who_can_claim).
The ACS design and methodology report can be found at https://www.census.gov/programs-surveys/acs/methodology/design-and-methodology.html. Additional information on ACS methodology, variable definitions, code lists, comparisons, statistical testing, and the accuracy of estimates can be found at https://www.census.gov/programs-surveys/acs/technical-documentation/code-lists.2010.html.
Patterns in the failure to assign unique identifiers are non-random and may introduce bias in subsequent analyses. Research on ACS microdata has shown that racial/ethnic minorities and those of lower socioeconomic status are less likely to receive identifiers than non-Hispanic Whites and those of higher socioeconomic status (Bond et al. 2014).
See https://www.gpo.gov/fdsys/pkg/USCODE-2007-title13/pdf/USCODE-2007-title13.pdf for the full text of Title 13 of the U.S. Code.
The 2010 Census enumerated 308,745,538 individuals. The 276.7 million native-born and foreign-born individuals enumerated in the 2010 Census and described in Tables 1 and 2 do not include the approximately 10 percent of individuals enumerated in the 2010 Census to whom the Census Bureau could not assign a unique person identifier and, therefore, could not be linked to SSA or IRS administrative records.
Like their naturalized and documented counterparts, undocumented immigrant labourers are required to pay taxes and, in many cases, file income tax returns using an Individual Taxpayer Identification Number (ITIN) because they meet income requirements or because they wish to collect returns or claim credits such as the Earned Income Tax Credit. Over 4 million 1040 s were filed in 2015 using an ITIN, and it is believed that many of these were filed by undocumented immigrants (see http://taxpayeradvocate.irs.gov/Media/Default/Documents/2015ARC/ARC15_Volume1_MSP_18_ITIN.pdf). A detailed analysis of undocumented immigrant selection, survival, and migration is beyond the approved scope of this analysis.
The vast majority of those who drop out of the longitudinal record do so simply because they are not documented in the record, though they continue to live in the United States. As noted above, these individuals likely earn little to no income, have little incentive to file, and are not claimed on a relative or caretaker’s return as a dependent.
Under many circumstances, emigrants are still required to file U.S. income taxes and, therefore, remain in the longitudinal record (see https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad). As such, the IRS administrative records are novel in that they provide insight into the international migration patterns of U.S. citizens living abroad.
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Disclaimer: This paper is released to inform interested parties of research and to encourage discussion. The views expressed are those of the authors and not necessarily those of the U.S. Census Bureau. All material presented here has been reviewed and approved for release by the Disclosure Review Board (DRB item #2018-156).
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Foster, T.B., Ellis, M.J. & Fiorio, L. Foreign-born and native-born migration in the U.S.: evidence from linked IRS administrative and census survey records. J Pop Research 35, 467–498 (2018). https://doi.org/10.1007/s12546-018-9215-x
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DOI: https://doi.org/10.1007/s12546-018-9215-x