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

Author
Keywords
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.

Year of Publication
1990
Number
276
Date Published
10/1990
Publication Language
eng
Citation Key
7940
URL
Working Papers