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

Author

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  • Phillip B. 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.

Suggested Citation

  • Phillip B. Levine, 1990. "Contemporaneous vs. Retrospective Unemployment: Through the Filter of Memory or the Muddle of the Current Population Survey?," Working Papers 656, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:276
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    Citations

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    Cited by:

    1. David Card & W. Craig Riddell, 1993. "A Comparative Analysis of Unemployment in Canada and the United States," NBER Chapters, in: Small Differences That Matter: Labor Markets and Income Maintenance in Canada and the United States, pages 149-190, National Bureau of Economic Research, Inc.
    2. Bell, Una Louise & Artola, Concha, 2001. "Identifying labour market dynamics using labour force survey data," ZEW Discussion Papers 01-44, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    unemployment rates; measurement error; current population survey; CPS;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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