clear all
set more off
set maxvar 10000

*Set path
***

*cd ---- specify path to \data_replication\psid\


cd raw_data

*Import data for individuals
do IND2011ER.do

*Generate unique id
*Last three digits are the person number
*ER30001-1968 Family id
*ER30002-Person number
gen hid=ER30001*1000+ER30002

cd ..
cd proc_data
save temp_master.dta,replace

****************************************
*Join with data after taxsim correction 
*in order to assign the unique id to the
*household head
****************************************
***
* IMPORTANT !!! paste files from "our_proc" subfolder into the "proc_data" folder if you didn't manage to get taxsim9 to run on your computer 
***

*1999
use temp_master.dta,clear
drop if ER33503!=10    //keep only heads in that year
drop if ER33502!=1     //keep only if head is still within family unit
rename ER33501 fam_ID_year
joinby fam_ID_year using temp1999.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER33504  //drop obs. that are inconsistent about the age of head
drop ER*
save p1999.dta, replace
*2001
use temp_master.dta,clear
drop if ER33603!=10    //keep only heads in that year
drop if ER33602!=1     //keep only if head is still within family unit
rename ER33601 fam_ID_year
joinby fam_ID_year using temp2001.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER33604  //drop obs. that are inconsistent about the age of head
drop if ER33608!=0        //drop if head has moved in/out (splitoffs)
drop ER*
save p2001.dta, replace
*2003
use temp_master.dta,clear
drop if ER33703!=10    //keep only heads in that year
drop if ER33702!=1     //keep only if head is still within family unit
rename ER33701 fam_ID_year
joinby fam_ID_year using temp2003.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER33704  //drop obs. that are inconsistent about the age of head
drop if ER33708!=0        //drop if head has moved in/out (splitoffs)
drop ER*
save p2003.dta, replace
*2005
use temp_master.dta,clear
drop if ER33803!=10    //keep only heads in that year
drop if ER33802!=1     //keep only if head is still within family unit
rename ER33801 fam_ID_year
joinby fam_ID_year using temp2005.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER33804  //drop obs. that are inconsistent about the age of head
drop if ER33808!=0        //drop if head has moved in/out (splitoffs)
drop ER*
save p2005.dta, replace
*2007
use temp_master.dta,clear
drop if ER33903!=10    //keep only heads in that year
drop if ER33902!=1     //keep only if head is still within family unit
rename ER33901 fam_ID_year
joinby fam_ID_year using temp2007.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER33904  //drop obs. that are inconsistent about the age of head
drop if ER33908!=0        //drop if head has moved in/out (splitoffs)
drop ER*
save p2007.dta, replace
*2009
use temp_master.dta,clear
drop if ER34003!=10    //keep only heads in that year
drop if ER34002!=1     //keep only if head is still within family unit
rename ER34001 fam_ID_year
joinby fam_ID_year using temp2009.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER34004  //drop obs. that are inconsistent about the age of head
drop if ER34008!=0        //drop if head has moved in/out (splitoffs)
drop ER*
save p2009.dta, replace
*2011
use temp_master.dta,clear
drop if ER34103!=10    //keep only heads in that year
drop if ER34102!=1     //keep only if head is still within family unit
rename ER34101 fam_ID_year
joinby fam_ID_year using temp2011.dta, unmatched(both)
drop if _merge!=3
drop _merge
drop if age_head!=ER34104  //drop obs. that are inconsistent about the age of head
drop if ER34108!=0        //drop if head has moved in/out (splitoffs)
drop ER*
save p2011.dta, replace


****************************************
*Create panel
****************************************
*Adjust the names of the variables
forval x=1999(2)2011{
use p`x'.dta, clear
ren aftertax_income_defl_equiv inc`x'
ren age_head age`x'
ren ed_head edu`x'
ren marital_status_head mstat`x'
ren fam_ID_year fam_ID`x'
ren size_fam size_fam`x'
drop fam_ID_1968 year_survey  //drop variables that are not useful
save pk`x'.dta,replace
}

*Join datasets to form a panel
use pk1999.dta, clear
forval x=2001(2)2011{
joinby hid using pk`x'.dta, unmatched(both)
drop if _merge!=3
drop _merge
local i=`x'-2
di "`i'"
gen b=age`x'-age`i'
tab b  
drop if b!=2 & b!=1 & b!=3   // drop people that are inconsistent about their age (1/2/3 are consistent due to the differences in month of interview)
drop b
gen a=edu`x'-edu`i'
tab a 
drop if a<0     // drop people that are inconsistent about their education (to adjust for any errors, see 2009 family codebook release info)
drop a
}

*Reshape the data for better use
reshape long inc age edu mstat fam_ID size_fam, i(hid) j(year) 

save for_reg.dta, replace