Topcoding of Usual Hourly Earnings
Before April 2023
The following information regarding topcodes for usual hourly earnings is adapted from section 2 of Unicon Corporation's Appendix H. This information is relevant to the IPUMS CPS variable HOURWAGE and the unharmonized variable UH_ERNHR_B1.
Both HOURWAGE and UH_ERNHR_B1 will be topcoded based on an individual's usual hours worked (IPUMS-CPS variable UH_ERNUSH_B1) variable, if the individual's edited usual weekly earnings variable is $999. The topcode is computed such that the product of usual hours times usual hourly earnings does not exceed an annualized wage of $100,000 ($1923.07 per week) in the years 1985-2002 and $150,000 ($2885.00 per week) in the years 2003-March 2023. Below is a general algorithm than may be used to figure top codes as well as a table that lists the appropriate topcodes as specified by the Census.
For the years 1979-1984, the topcode is $99.99.
For the years 1985-2002, for usual hours worked <20, the topcode is $99.99, and for usual hours worked 20+, the topcode is $1923.07/(usual hours worked)
| Hours | Topcode | Hours | Topcode | Hours | Topcode | Hours | Topcode |
|---|---|---|---|---|---|---|---|
| 1 | $99.99 | 26 | $73.96 | 51 | $37.70 | 76 | $25.30 |
| 2 | $99.99 | 27 | $71.22 | 52 | $36.98 | 77 | $24.97 |
| 3 | $99.99 | 28 | $68.68 | 53 | $36.28 | 78 | $24.65 |
| 4 | $99.99 | 29 | $66.31 | 54 | $35.61 | 79 | $24.34 |
| 5 | $99.99 | 30 | $64.10 | 55 | $34.96 | 80 | $24.03 |
| 6 | $99.99 | 31 | $62.03 | 56 | $34.34 | 81 | $23.74 |
| 7 | $99.99 | 32 | $60.09 | 57 | $33.73 | 82 | $23.45 |
| 8 | $99.99 | 33 | $58.27 | 58 | $33.15 | 83 | $23.16 |
| 9 | $99.99 | 34 | $56.56 | 59 | $32.59 | 84 | $22.89 |
| 10 | $99.99 | 35 | $54.94 | 60 | $32.05 | 85 | $22.62 |
| 11 | $99.99 | 36 | $53.41 | 61 | $31.52 | 86 | $22.36 |
| 12 | $99.99 | 37 | $51.97 | 62 | $31.01 | 87 | $22.10 |
| 13 | $99.99 | 38 | $50.60 | 63 | $30.52 | 88 | $21.85 |
| 14 | $99.99 | 39 | $49.30 | 64 | $30.04 | 89 | $21.60 |
| 15 | $99.99 | 40 | $48.07 | 65 | $29.58 | 90 | $21.36 |
| 16 | $99.99 | 41 | $46.90 | 66 | $29.13 | 91 | $21.13 |
| 17 | $99.99 | 42 | $45.78 | 67 | $28.70 | 92 | $20.90 |
| 18 | $99.99 | 43 | $44.72 | 68 | $28.28 | 93 | $20.67 |
| 19 | $99.99 | 44 | $43.70 | 69 | $27.87 | 94 | $20.45 |
| 20 | $96.15 | 45 | $42.73 | 70 | $27.47 | 95 | $20.24 |
| 21 | $91.57 | 46 | $41.80 | 71 | $27.08 | 96 | $20.03 |
| 22 | $87.41 | 47 | $40.91 | 72 | $26.70 | 97 | $19.82 |
| 23 | $83.61 | 48 | $40.06 | 73 | $26.34 | 98 | $19.62 |
| 24 | $80.12 | 49 | $39.24 | 74 | $25.98 | 99 | $19.42 |
| 25 | $76.92 | 50 | $38.46 | 75 | $25.64 |
For the years 2003-March 2023, for usual hours worked <29, the topcode is $99.99, and for usual hours worked 29+, the topcode is $2885.07/(usual hours worked)
| Hours | Topcode | Hours | Topcode | Hours | Topcode | Hours | Topcode |
|---|---|---|---|---|---|---|---|
| 1 | $99.99 | 26 | $99.99 | 51 | $56.57 | 76 | $37.96 |
| 2 | $99.99 | 27 | $99.99 | 52 | $55.48 | 77 | $37.47 |
| 3 | $99.99 | 28 | $99.99 | 53 | $54.43 | 78 | $36.99 |
| 4 | $99.99 | 29 | $99.48 | 54 | $53.43 | 79 | $36.52 |
| 5 | $99.99 | 30 | $96.17 | 55 | $52.45 | 80 | $36.06 |
| 6 | $99.99 | 31 | $93.06 | 56 | $51.52 | 81 | $35.62 |
| 7 | $99.99 | 32 | $90.16 | 57 | $50.61 | 82 | $35.18 |
| 8 | $99.99 | 33 | $87.42 | 58 | $49.74 | 83 | $34.76 |
| 9 | $99.99 | 34 | $84.85 | 59 | $48.90 | 84 | $34.35 |
| 10 | $99.99 | 35 | $82.43 | 60 | $48.08 | 85 | $33.94 |
| 11 | $99.99 | 36 | $80.14 | 61 | $47.30 | 86 | $33.55 |
| 12 | $99.99 | 37 | $77.97 | 62 | $46.53 | 87 | $33.16 |
| 13 | $99.99 | 38 | $75.92 | 63 | $45.79 | 88 | $32.78 |
| 14 | $99.99 | 39 | $73.97 | 64 | $45.08 | 89 | $32.42 |
| 15 | $99.99 | 40 | $72.13 | 65 | $44.38 | 90 | $32.06 |
| 16 | $99.99 | 41 | $70.37 | 66 | $43.71 | 91 | $31.70 |
| 17 | $99.99 | 42 | $68.69 | 67 | $43.06 | 92 | $31.36 |
| 18 | $99.99 | 43 | $67.09 | 68 | $42.43 | 93 | $31.02 |
| 19 | $99.99 | 44 | $65.57 | 69 | $41.81 | 94 | $30.69 |
| 20 | $99.99 | 45 | $64.11 | 70 | $41.21 | 95 | $30.37 |
| 21 | $99.99 | 46 | $62.72 | 71 | $40.63 | 96 | $30.05 |
| 22 | $99.99 | 47 | $61.38 | 72 | $40.07 | 97 | $29.74 |
| 23 | $99.99 | 48 | $60.10 | 73 | $39.52 | 98 | $29.44 |
| 24 | $99.99 | 49 | $58.88 | 74 | $38.99 | 99 | $29.14 |
| 25 | $99.99 | 50 | $57.70 | 75 | $38.47 |
April 2023 and on
Beginning in April 2023, hourly earnings were rounded and topcoding methodology was changed as a privacy protection measure. Beginning in this month, the Census Bureau imposes a "dynamic" topcode in which the topcoded value is the weighted average of the reported earnings of the top 3% of earners and this value is assigned to that top 3%. Rounding earnings are part of a set of privacy measure that were phased in beginning in January of 2023; April of 2023 is the first month in which the respondents subject to the new privacy measures answered earnings questions. Because of the way the new privacy measures are phased in, only those respondents in month-in-sample 4 of the CPS rotation (MISH = 4) have new privacy measures applied to their earnings values. HOURWAGE reports un-rounded hourly earnings for pre-April 2023 data only; HOURWAGE2 imposes new rounding criteria on pre-April 2023 data and attempts to re-create the dynamic topcode to provide users with comparable hourly earnings over time. IPUMS CPS calculates the weighted average of the top 3% of earners using unrounded HOURWAGE data and assigns this value to the top 3% of earners.
However, as detailed above, prior to the introduction of the dynamic topcode, hourly earnings in pre-April 2023 samples were topcoded based on usual weekly hours worked. These topcoded values are included as-is in our calculation of the dynamic topcode. As a result, the IPUMS CPS calculations of the dynamic topcode in HOURWAGE2 for pre-April 2023 samples are a conservative estimate and may be lower than the topcode value that the Census Bureau would have been calculated using internal data. The Census Bureau recommends that users work with the lowest topcode value when analyzing multiple months to which the new dynamic topcode is applied. Though the Census Bureau does not provide specific recommendations for how users should approach handling the comparison of values from before and after the new measures were introduced, IPUMS recommends using the lowest topcode value from HOURWAGE2 across all months being analyzed, including those from before and after the Census Bureau introduced the dynamic topcode.
Due to the way rounding and dynamic topcoding of earnings is being phased in by the Census Bureau, IPUMS has applied its method to calculate topcodes for MIS 8 reocrds in data from April 2023-March 2024. As a result, two topcode values may exist for these months. See the HOURWAGE2 variable description for values. Users who wish to access un-rounded hourly earnings values that are topcoded only based on weekly hours worked, as described in the previous section, for the MISH 8 records in these months should use UH_ERNHR_B2.
After March of 2024, all records who report earnings will have values rounded and topcoded by the Census Bureau and these will be available in HOURWAGE2. Note that HOURWAGE2 topcodes will change from month to month and can be identified by taking the maximum of HOURWAGE2 values, excluding NIU records.
See the Census Bureau's user note for more information on the ew privacy protection measures.
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