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The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up?

September 2, 2014 Comments off

The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up? (PDF)
Source: Princeton University (Krueger, et al.)

This paper documents that rotation group bias — the tendency for labor force statistics to vary systematically by month in sample in labor force surveys — in the Current Population Survey (CPS) has worsened considerably over time. The estimated unemployment rate for earlier rotation groups has grown sharply relative to the unemployment rate for later rotation groups; both should be nationally representative samples. The rise in rotation group bias is driven by a growing tendency for respondents to report job search in earlier rotations relative to later rotations. We investigate explanations for the change in bias. We find that rotation group bias increased discretely after the 1994 CPS redesign and that rising nonresponse is likely a significant contributor. Survey nonresponse increased after the redesign, and subsequently trended upward, mirroring the time pattern of rotation group bias. Consistent with this explanation, there is only a small increase in rotation group bias for households that responded in all eight interviews. An analysis of rotation group bias in Canada and the U.K. reveal no rotation group bias in Canada and a modest and declining bias in the U.K. There is not a “Heisenberg Principle” of rotation group bias, whereby the bias is an inherent feature of repeated interviewing. We explore alternative weightings of the unemployment rate by rotation group and find that, despite the rise in rotation group bias, the official unemployment does no worse than these other measures in predicting alternative measures of economic slack or fitting key macroeconomic relationships.

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Presidents and the U.S. Economy: An Econometric Exploration

August 8, 2014 Comments off

Presidents and the U.S. Economy: An Econometric Exploration (PDF)
Source: Princeton University (Blinder and Watson)

The U.S. economy has grown faster—and scored higher on many other macroeconomic metrics– when the President of the United States is a Democrat rather than a Republican. For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically signi ficant, despite the fact that postwar history includes only 16 complete presidential terms. This paper asks why. The answer is not found in technical time series matters (such as differential trends or mean reversion), nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks , superior TFP performance, a more favorable international environment, and perhaps more op timistic consumer expectations about the near- term future. Many other potential explanations are examined but fail to explain the partisan growth gap.

See: Economy Grows Faster under Democratic Presidents…and Corporations Make more Profits (AllGov.com)

The Future of Children: Military Children and Families

September 30, 2013 Comments off

The Future of Children: Military Children and Families
Source: Woodrow Wilson School of Public and International Affairs (Princeton University) and The Brookings Institution

In this issue of The Future of Children, we seek to integrate existing knowledge about the children and families of today’s United States military; to identify what we know (and don’t know) about their strengths and the challenges they face, as well as the programs that serve them; to specify directions for future research; and to illuminate the evidence (or lack thereof) behind current and future policies and programs that serve these children and families. At the same time, we highlight how research on nonmilitary children and families can help us understand their military-connected counterparts and, in turn, how research on military children can contribute both to a general understanding of human development and to our knowledge of other populations of American children.

Job Loss in the Great Recession: Historial Perspective from the Displaced Workers Survey, 1984-2010

October 10, 2011 Comments off

Job Loss in the Great Recession: Historial Perspective from the Displaced Workers Survey, 1984-2010 (PDF)
Source: Princeton University Industrial Relations Section Working Paper

The Great Recession from December 2007 to June 2009 is associated with a dramatic weakening of the labor market from which the labor market is now only slowly recovering. The unemployment rate remains stubbornly high and durations of unemployment are unprecedentedly long. I use data from the Dis- placed Workers Survey (DWS) from 1984-2010 to investigate the incidence and consequences of job loss from 1981-2009. In particular, the January 2010 DWS, which captures job loss during the 2007-2009 period, provides a window through which to examine the experience of job losers in the Great Recession and to compare their experience to that of earlier job losers. These data show a record high rate of job loss, with almost one in six workers reporting having lost a job in the 2007-2009 period. The consequences of job loss are also very serious during this period with very low rates of reemployment, difficulty fi nding full-time employment, and substantial earnings losses.

Estimating the Return to College Selectivity over the Career Using Administrative Earning Data

March 1, 2011 Comments off

Estimating the Return to College Selectivity over the Career Using Administrative Earning Data (PDF)
Source: Princeton University Industrial Relations Section

We estimate the monetary return to attending a highly selective college using the College and Beyond (C&B) Survey linked to Detailed Earnings Records from the Social Security Administration (SSA). This paper extends earlier work by Dale and Krueger (2002) that examined the relationship between the college that students attended in 1976 and the earnings they self-reported reported in 1995 on the C&B follow-up survey. In this analysis, we use administrative earnings data to estimate the return to various measures of college selectivity for a more recent cohort of students: those who entered college in 1989. We also estimate the return to college selectivity for the 1976 cohort of students, but over a longer time horizon (from 1983 through 2007) using administrative data.

We find that the return to college selectivity is sizeable for both cohorts in regression models that control for variables commonly observed by researchers, such as student high school GPA and SAT scores. However, when we adjust for unobserved student ability by controlling for the average SAT score of the colleges that students applied to, our estimates of the return to college selectivity fall substantially and are generally indistinguishable from zero. There were notable exceptions for certain subgroups. For black and Hispanic students and for students who come from less-educated families (in terms of their parents’ education), the estimates of the return to college selectivity remain large, even in models that adjust for unobserved student characteristics.

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