wage and salary jobs, nonfarm self-employment, and farm self-employment) for each person and then allocates that sum to each month in proportion to the simulated number of weeks worked in that month.
MATH
The ALLOY routine sums the earnings variables, then computes an average weekly amount (annual earnings divided by total number of weeks worked), and then multiplies this amount by 4.333 to obtain average earnings per month. This monthly figure is allocated to each simulated month of employment. Income from nonfarm self-employment is constrained to be greater than or equal to zero in order to mimic the food stamp program regulations regarding losses. (Net rental income is similarly constrained—see discussion of unearned income below.)
HITSM
This model first determines the average hourly wage rate for each person. Then during each week in which an individual is simulated to work, weekly earnings are calculated as the product of the wage rate times the number of hours normally worked per week during the year. Weekly earnings are summed to produce monthly earnings, where each month is assumed to include 4.33 weeks.
Comment
The procedures for allocating earned income are essentially the same in all three models, with the exception that MATH does not allow for part-month employment.
Determination of Monthly Unearned Income
Input Data
The March CPS public-use files provide, for each person 15 years of age and older at the time of the March supplement interview, the following items pertaining to unearned income during the preceding calendar year:
receipt of income from private, federal, military, and state and local government pensions; total annual pension income;
receipt of income from social security and railroad retirement; total annual social security/railroad retirement income;
receipt of income from interest; total annual interest income;
