Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101366
Authors: 
Feng, Shuaizhang
Hu, Yingyao
Year of Publication: 
2012
Series/Report no.: 
Working Papers, The Johns Hopkins University, Department of Economics 595
Abstract: 
Using recent results in the measurement error literature, we show that the official U.S. unemployment rate substantially underestimates the true level of unemployment, due to misclassification errors in the labor force status in the Current Population Survey. During the period from January 1996 to August 2011, the corrected monthly unemployment rates are between 1 and 4.4 percentage points (2.1 percentage points on average) higher than the official rates, and are more sensitive to changes in business cycles. The labor force participation rates, however, are not affected by this correction.
Subjects: 
Unemployment Rate
Labor Force Participation Rate
Misclassification
Measurement Error
Current Population Surveys
JEL: 
J21
J64
C14
Document Type: 
Working Paper

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