WWW.ABSTRACT.DISLIB.INFO
FREE ELECTRONIC LIBRARY - Abstracts, online materials
 
<< HOME
CONTACTS



Pages:     | 1 ||

«Is the U.S. Unemployment Rate Today Already as High as It Was in 1982? John Schmitt and Dean Baker March 2009 Center for Economic and Policy Research ...»

-- [ Page 2 ] --

The decline in the coverage rate of the CPS, a phenomenon that has affected almost all government and private household surveys, has had an important impact on the survey’s ability to estimate the national employment rate. In earlier work, we demonstrated that in 2000, the CPS overstated the employment rate by about 1.4 percentage points, based on a comparison of employment rates in the CPS with an adjusted measure for employment in the 2000 Census covering the same period.6 (The coverage rate for the CPS has fallen further since 2000.) These earlier estimates suggest that about one-third – 0.5 percentage points –of this overstatement of employment corresponds to an understatement of the unemployment rate relative to its true rate.7 We also showed that the deterioration in coverage rates between 1986 and 2005 likely added 0.6 percentage points to the overstatement in national employment rates (with the overstatement of employment increasing from

1.2 percentage points in 1986 to about 1.8 percentage points in 2005).8 Assuming, as suggested above, that about one-third of this rising overstatement of employment rates corresponds to a rising underestimate of the national unemployment rate, the long-term decline in CPS coverage rates means that recent unemployment rates understate unemployment by about 0.2 percentage points relative to 1982.

Combining the Two Effects

Figure 1 summarizes the impact of both the demographic and the survey effects on comparisons of unemployment rates between 1982 and February 2009. The first bar shows the official unemployment rate for 1982 – 9.7 percent. The second bar shows the official unemployment rate for 2008 – 8.1 percent, or 1.6 percentage points below the 1982 rate. The third bar gives our estimate of the unemployment rate in February 2009 if we had the same, much younger age structure now that we had in 1982 – about 9.3 percent, or just 0.4 percentage points below the average rate for 1982. The fourth column presents our estimated unemployment for 2009 assuming that the CPS had the same coverage rate in 2009 that it had in 1982 – about 8.3 percent. The final column combines our estimates of both effects. The resulting unemployment rate – which puts the 2009 rate on a comparable basis with the 1982 rate – suggests that the gap between the current unemployment rate and that of 1982 is now just 0.2 percentage points.

–  –  –

Conclusion The aging of the US population and the reduction in coverage rates of the main US labor-market survey mean that the official unemployment rate does not provide a completely consistent basis for comparing labor-market slack between the early 1980s recession and the current economic downturn. We calculate an unemployment rate for February 2009 that takes these demographic and statistical issues into account.

Putting the February 2009 unemployment rate on a basis that is more directly comparable to the unemployment rate in 1982, the February 2009 rate rises from 8.1 percentage points to 9.5 percentage points, just 0.2 percentage points below the 9.7 percent average for 1982. Adjusting for the aging population raises the February 2009 unemployment rate about 1.2 percentage points;

adjusting for the change in the coverage rate of the CPS raises the February 2009 unemployment rate an additional 0.2 percentage points. Together, both effects eliminate almost all (1.4 percentage points) of the 1.6 percentage-point gap between the 1982 and the February 2009 unemployment rates. The current unemployment rate, therefore, is nearly identical to the rate reached in the year with the highest annual unemployment rate in the postwar period.

Is the U.S. Unemployment Rate Today Already as High as It Was in 1982? 7 References Schmitt, John and Dean Baker. 2005. “Correcting Employment Rates in the 2000 Decennial Census using information from the CPS Census 2000 Match,” Center for Economic and Policy Research Briefing Paper.

Schmitt, John and Dean Baker. 2006a. “Missing Inaction: Evidence of Undercounting of NonWorkers in the Current Population Survey,” Center for Economic and Policy Research Briefing Paper.

Schmitt, John and Dean Baker. 2006b. “The Impact of Undercounting in the Current Population

Pages:     | 1 ||


Similar works:

«An axiomatic characterization of the Owen-Shapley spatial power index Hans Peters∗ Jos´ M. Zarzuelo† e This version, January 2015 Abstract We present an axiomatic characterization of the Owen-Shapley spatial power index for the case where issues are elements of two-dimensional space. This characterization employs a version of the transfer condition, which enables us to unravel a spatial game into spatial games connected to unanimity games. The other axioms are spatial versions of anonymity...»

«Munich Personal RePEc Archive On the Earliest Economic Growth and Income Inequality; or Modified Old Philosophical, Forgotten or Ignored, Study Reconsidered and Developed Atabek Atayev 28. March 2013 Online at http://mpra.ub.uni-muenchen.de/45448/ MPRA Paper No. 45448, posted 28. March 2013 13:34 UTC On the Earliest Economic Growth and Income Inequality; or Modified Old Philosophical, Forgotten or Ignored, Study Reconsidered and Developed Atabek Atayev* Author: Atabek Atayev, Independent...»

«Munich Personal RePEc Archive Opportunities in microfinance risk management Karel Janda and Pavel Zetek Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Faculty of Finance and Accounting, University of Economics, Prague 23 January 2013 Online at https://mpra.ub.uni-muenchen.de/43960/ MPRA Paper No. 43960, posted 23 January 2013 16:34 UTC Munich Personal RePEc Archive Opportunities in microfinance risk management Karel Janda and Pavel Zetek Institute of...»

«International Journal of Development and Sustainability Online ISSN: 2168-8662 – www.isdsnet.com/ijds Volume 1 Number 3, December 2012 (In Press) ISDS Article ID: IJDS12100302 Special Issue: Development and Sustainability in Africa – Part 1 Community leadership and the challenges of community development in Nigeria: The case of Boki local government area, Cross River State L.O. Udensi 1*, O.S. Udoh 1, Gibson L.K. Daasi 2, F.N. Igbara 1 Department of Sociology/Anthropology, University of...»

«WPS7197 Public Disclosure Authorized Policy Research Working Paper 7197 Background Paper to the 2015 World Development Report Public Disclosure Authorized “Small Miracles”—Behavioral Insights to Improve Development Policy World Development Report 2015 Public Disclosure Authorized Allison Demeritt Karla Hoff Public Disclosure Authorized Development Economics Office of the Senior Vice President and Chief Economist February 2015 Policy Research Working Paper 7197 Abstract One of the most...»

«Deconstructing India’s Inclusive Development Agenda Samir Saran & Vivan Sharan “Managing a complex economy is a difficult task, more so when it is a growing economy in a globalised world” – Pranab Mukerjee1 The UPA government has realised that managing an economy which is integrated with the global financial system is a difficult task in this post-financial crisis world. The focus of the government has quickly shifted from a high growth rate strategy to an inclusive strategy or has it?...»





 
<<  HOME   |    CONTACTS
2017 www.abstract.dislib.info - Abstracts, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.