Administrative data

What Is Administrative data?

Administrative data refers to information collected and maintained by government agencies and other organizations primarily for operational purposes, rather than for research or statistical analysis. This can include records generated during the provision of public services, regulatory oversight, or essential record-keeping functions such as tax collection, social security administration, and vital statistics⁴³, ⁴⁴. Within the broader realm of economic data and public policy analysis, administrative data serves as a rich and often comprehensive source of information. Unlike data gathered through surveys, administrative data encompasses records on entire populations engaging with specific government services, offering profound insights into various aspects of society⁴². Its ongoing collection as a byproduct of daily operations means administrative data can provide continuous, real-time insights, which are invaluable for statistical analysis and understanding societal trends.

History and Origin

The concept of collecting administrative data is rooted in the long-standing need for governments and organizations to keep records for practical administration. For centuries, records of land holdings were used to administer taxes, and vital records like births, deaths, and marriages have been systematically recorded for public administration⁴¹. In the 19th century, with the establishment of international cooperation institutions like the International Statistical Institute, the formalization of data collection for administrative purposes began to gain momentum. However, the true potential of administrative data for broader social science research and policy evaluation began to be realized more fully in recent decades with the advent of computerization and advanced data processing technologies⁴⁰. This technological shift made it feasible to process large datasets and link information across different administrative systems, transforming what was once merely operational information into a valuable resource for economic analysis and evidence-based policymaking³⁹. The UK Administrative Data Research Network, established in 2013, exemplifies this growing recognition of administrative data's potential for public benefit, despite considerable challenges in data access and usage³⁸.

Key Takeaways

• Administrative data is collected for operational and record-keeping purposes by government agencies and other entities, not primarily for research.
• It often provides comprehensive coverage of specific populations, offering a complete picture of individuals interacting with public services.
• A key advantage of administrative data is its ready availability and typically lower collection cost compared to new surveys, as the data already exists³⁶, ³⁷.
• Linking different administrative datasets can reveal complex interactions and dependencies, enhancing understanding of societal dynamics³⁴, ³⁵.
• While offering significant benefits for research and policymaking, administrative data presents challenges related to privacy, data quality, and accessibility³², ³³.

Interpreting the Administrative data

Interpreting administrative data requires an understanding of its original purpose and collection methodology. Since administrative data is collected for program administration, regulatory compliance, or law enforcement, its variables and definitions are tied to these specific functions³⁰, ³¹. For instance, tax records provide detailed financial information, but the definitions of income or deductions are dictated by tax law, which may differ from definitions used in economic indicators or financial modeling²⁹.

Researchers and analysts must consider that administrative data typically describes individuals or entities participating in a specific service or program, and it does not provide information on those outside the scope of that service²⁸. This means that while administrative data can offer deep insights into program participants, it may not be representative of the general population for certain research questions. Understanding these nuances is crucial for accurate quantitative research and drawing valid conclusions.

Hypothetical Example

Consider a government agency that manages unemployment benefits. This agency continuously collects administrative data on individuals applying for and receiving benefits. This data includes information such as application dates, approval statuses, benefit amounts, duration of benefits received, previous employment history, and reasons for unemployment.

For a hypothetical study, an economist could use this administrative data to analyze unemployment trends following a major economic downturn. By tracking benefit claims over time, they could observe the immediate impact of the downturn on employment and the subsequent recovery. For example, by linking this data with information from the tax authority (another source of administrative data), they could analyze the cost-benefit analysis of unemployment support programs on individual incomes and state finances, comparing benefit recipients' income before and after their unemployment period. This allows for a detailed examination of how individuals transition back into the workforce and the long-term economic effects.

Practical Applications

Administrative data has a wide array of practical applications across various sectors, particularly in government, research, and public services. In public policy, it is crucial for program evaluation, resource allocation, and identifying areas where change is needed to improve lives²⁶, ²⁷. For example, agencies can use administrative data from healthcare systems to track public health outcomes, monitor disease prevalence, and assess the effectiveness of health interventions. Similarly, education departments utilize administrative data on student enrollment, attendance, and academic performance to evaluate educational programs and identify areas for improvement.

In economic analysis, tax data, social security records, and business registrations provide valuable insights into employment, income distribution, and economic activity. The International Monetary Fund (IMF) highlights how statistical agencies worldwide are increasingly leveraging administrative data, particularly tax data, to enhance the compilation of national accounts statistics, leading to more timely, detailed, and accurate economic data while reducing collection burdens²⁵. This reliance on existing data collection efforts minimizes costs and respondent burden for statistical agencies²⁴.

Limitations and Criticisms

Despite its numerous advantages, administrative data has several limitations and faces significant criticisms, particularly concerning data quality and privacy laws. A primary limitation is that administrative data is collected for specific operational purposes, meaning the variables and definitions may not perfectly align with the requirements for research or statistical analysis²², ²³. There can be issues with missing data, inconsistencies over time due to changes in laws or administrative practices, and a lack of control over the data collection process compared to survey methods²¹.

Furthermore, privacy and ethical concerns are paramount. Because administrative data often contains sensitive personal information, strict regulations and protocols are necessary to protect individual privacy when used for research or policymaking¹⁹, ²⁰. Unauthorized access or data breaches pose significant risks¹⁸. Agencies are responsible for ensuring data is collected and processed lawfully, providing transparent information about its use, and implementing robust data security measures¹⁶, ¹⁷. The growing availability of data, coupled with advances in analytics and artificial intelligence, presents ongoing challenges in maintaining privacy and preventing misuse¹⁴, ¹⁵. Critics also point out that gaining access to and effectively utilizing administrative data can be challenging due to bureaucratic hurdles, data fragmentation across different departments, and a lack of standardized data infrastructure¹², ¹³.

Administrative data vs. Survey data

The fundamental difference between administrative data and survey data lies in their primary purpose and collection methodology. Administrative data is routinely collected as a byproduct of managing programs or delivering services, such as tax records, social security contributions, or healthcare interactions. This means it often covers an entire population or a large segment of it that interacts with a specific service, offering comprehensive and continuous information¹⁰, ¹¹. In contrast, survey data is collected specifically for research or statistical purposes, typically from a sample of a population. While surveys allow researchers to tailor questions to specific hypotheses and gather nuanced information (including opinions and attitudes), they are subject to sampling errors, response bias, and can be costly and time-consuming to administer⁸, ⁹. Administrative data, while offering breadth and potentially lower data collection costs, may lack the specific variables or the depth of qualitative information that a tailored survey can provide⁷.

FAQs

What are common examples of administrative data?

Common examples include records from government agencies like tax returns, social security administration records, unemployment insurance claims, birth and death certificates, and educational enrollment data⁶.

How is administrative data used in financial analysis?

In financial analysis, administrative data can be used to understand economic trends, assess the impact of policies on household income or business activity, and inform forecasting. For instance, tax data provides insights into income distribution and economic output⁵.

What are the main benefits of using administrative data for research?

The main benefits include its comprehensive coverage of populations, the ability to conduct longitudinal studies over long periods, lower data collection costs compared to new surveys, and the potential to link various datasets to create richer analytical resources³, ⁴.

Are there privacy concerns when using administrative data?

Yes, significant privacy concerns exist because administrative data often contains sensitive personal information. Strict privacy laws and robust data security measures are essential to protect individuals' information and prevent unauthorized access or misuse¹, ².