Title

Contemporaneous vs. Retrospective Unemployment: Through the Filter of Memory or the Muddle of the Current Population Survey?

Author(s)

Phillip B. Levine Phillip Levine (Princeton University)

Abstract

This paper documents and attempts to explain the observed disparities between unemployment rates computed from contemporaneous and retrospective CPS data. The maintained hypothesis is that the discrepancies are consistent with different definitions of unemployment between the two measures. The longitudinal nature of the CPS, which allows a respondent's answers to be matched between one year and the next, is exploited to examine two commonly expressed shortcomings in the contemporaneous definition. I find that relative to the retrospective measure, more workers with weak labor force attachment are considered unemployed in the contemporaneous rate. In addition, discouraged workers, who are classified as out of the labor force according to the contemporaneous definition, may be counted as unemployed in the retrospective.

Creation Date

1990-10

Section URL ID

IRS

Paper Number

276

URL

https://dataspace.princeton.edu/bitstream/88435/dsp016395w709f/1/276.pdf

File Function

Jel

H41, H42

Keyword(s)

unemployment rates, measurement error, current population survey, CPS

Suppress

false

Series

1