The Need for Open, Accessible Wage Data

The new JustJobs Network volume on wages examines critical wage debates that are playing out across the world. But in order to further understand how wages shape the employment outcomes of people, there is an acute need to make wage data more accessible.

A recent article by Florian Blum and Rohini Pande outlines the political economy of data collection in developing countries. They point out that increasing data access to researchers is as critical as the project of collecting more data, and that greater accessibility would empower researchers to inform policymaking.

But improving data access also increases the scrutiny governments face. Countries resist releasing data on indicators that might show underperformance. For example, the Indian government allowed the PISA test – an international study of pupil achievement – only once, and following its poor performance, the country has refused to participate again.

Another major obstacle to clear and consistent wage data is the challenge of estimating wages in the informal sector. This is particularly difficult in the case of casual or temporary workers. However, as we have seen in India, these are challenges that can be overcome. The Ministry of Labour and Employment in India has been collecting wages on selected rural indicators as part of the “Wage Rates in Rural India” series. Over time, this will provide researchers with a time series of wages in rural India for selected occupations that can be studied along with other economic indicators – assuming the government continues to make the data transparent to researchers.

Major benefits have already emerged from providing researchers access to large and valuable datasets. As Blum and Pande point out, by making its data transparent and accessible to researchers, Denmark has enabled valuable policy research. One paper showed that tax evasion was higher if earnings were self-reported as opposed to being recorded by third parties. This led to major tax reform in Denmark.

Access to Internal Revenue Service administrative data allowed Raj Chetty, Nathaniel Henderson and Lawrence F. Katz of Harvard University to demonstrate that assisting families to relocate to better neighborhoods can have long-term positive effects for the children in those families, including increased income in adulthood.

Given the impact access to data can have, governments around the world have a responsibility to improve their data monitoring capabilities and increase the data that they are sharing with researchers and the public.