Estimating variances for modeled wage estimates

The Modeled Wage Estimates (MWE) program publishes mean hourly wages by occupation, geographic area, and worker characteristic (for example, full-time workers). The MWE program combines data from two U.S. Bureau of Labor Statistics programs: the Occupational Employment Statistics (OES) and the National Compensation Survey (NCS). For the first few years of the MWE program, there were no estimates of variance. In 2018, variance estimates were published for the first time for the MWE program, for the May 2017 reference month. This article first shows how the OES and NCS microdata are combined to produce a mean wage estimate. It then focuses on the new variance estimation methodology, highlighting how the variability of both the OES and NCS sample designs are simultaneously captured. A small sample of MWE mean wages and variances are provided for the most recent estimates, for the May 2018 reference month.