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Annualizing Labor Market, Inequality, and Poverty Indicators

Author

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  • Eduardo Lora
  • Miguel Benítez
  • Diego Gutiérrez

Abstract

Widely, 12-month or 4-quarter average labor market, inequality and poverty indicators computed from repeated cross sections of household surveys are interpreted as annual. This is a valid interpretation only when several very specific criteria are met. Annual measures of indicators such as labor participation rates differ from their 12-month- or quarterly averages except when those who participate in a month or quarter also participate the other 11 months or three quarters. The same apply to unemployment rates and poverty rates. We propose several methods to accurately annualize sub-annual data. Some rely on ancillary questions often included in household surveys, others require econometric techniques such as predictive mean matching. Using data for Colombia we present annual measures of labor participation, occupation, unemployment, per capita labor income, average per capita household income, the Gini coefficients of labor income and per-capita household income, and moderate and extreme poverty rates.

Suggested Citation

  • Eduardo Lora & Miguel Benítez & Diego Gutiérrez, 2021. "Annualizing Labor Market, Inequality, and Poverty Indicators," Commitment to Equity (CEQ) Working Paper Series 113, Tulane University, Department of Economics.
    • Handle: RePEc:tul:ceqwps:113
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    References listed on IDEAS

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    More about this item

    Keywords

    annualization; employment; income distribution; income poverty; Gini coefficient; labor income; labor participation; poverty; unemployment;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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