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Adjusting the Gross Changes Data: Implications for Labor Market Dynamics

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  • James M. Poterba
  • Lawrence H. Summers

Abstract

This paper develops a procedure for adjusting the Current Population Survey gross changes data for the effects of reporting errors. The corrected data suggest that the labor market is much less dynamic than has frequently been suggested. Conventional measures sy understate the duration of unemployment by as much as eighty percent and overstate the extent of movement into and out ofthe labor force by several hundred percent. The adjusted data also throw demographic differences in patterns of labor market dynamics into sharp relief.
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Suggested Citation

  • James M. Poterba & Lawrence H. Summers, 1984. "Adjusting the Gross Changes Data: Implications for Labor Market Dynamics," Working papers 351, Massachusetts Institute of Technology (MIT), Department of Economics.
    • Handle: RePEc:mit:worpap:351
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    Cited by:

    1. Michael R. Darby & John C. Haltiwanger & Mark W. Plant, 1986. "The Ins and Outs of Unemployment: The Ins Win," NBER Working Papers 1997, National Bureau of Economic Research, Inc.
    2. James W. Shockey, 1988. "Adjusting for Response Error in Panel Surveys," Sociological Methods & Research, , vol. 17(1), pages 65-92, August.

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