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Time spent unemployed:
a new look at data from the CPS
In July 1983, 8 months after the unemployment rate peaked during the 1981-82 recession, the published mean duration of unemployment figure reached 21.2 weeks. In October 1986, 47 months into the recovery, unemployment duration had fallen to 15.2 weeks. Although these numbers move in the expected direction, do they really provide an accurate portrayal of the time individuals spend unemployed? In a 1970 article in the Review, Hyman B. Kaitz considered the question of how long a person remains unemployed "on average." He concluded that it was "a simple question, yet one that cannot be easily answered despite the wealth of data available."1 Some reasons for this difficulty are tied to the choices of data and statistical techniques used for estimating unemployment duration. Other reasons reflect basic disagreements among economists as to what constitutes the best measure of the average time individuals remain unemployed.
For example, many of the earliest articles written on unemployment duration concentrated on the fact that the published statistics measure the average age of unemployment spells among the currently unemployed; that is, the survey interrupts spells which are in progress. As a result, the statistics do not show the average completed length of spells or average total time unemployed for these individuals. A consensus emerged from these studies that the average total time spent unemployed should be measured. What has yet to emerge is a consensus as to how to accomplish this goal.
This article examines the conceptual and empirical problems encountered in selecting the most appropriate measure of the average total time an individual remains unemployed, or the duration of a completed spell of unemployment. The discussion of these problems helps set the stage for the focus of our analysis a comparison of different methods of using data from the Current Population Survey (CPS) to construct estimates of unemployment duration. Two sources of data are considered: published cross-sections of time unemployed and unpublished listings of time unemployed by single weeks of unemployment. In conducting this comparison, we find that the unpublished data permit development of new and robust estimates of average time spent unemployed; in particular, cyclically sensitive estimates can be developed monthly.
This excerpt is from an article published in the July 1987 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 Hyman B. Kaitz, "Analyzing the length of spells of unemployment," Monthly Labor Review, November 1970, p. 11.
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