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

Author(s): Krueger, Alan B.; Mas, Alexandre; Niu, Xiaotong

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Abstract: We document that rotation group bias—the tendency for the unemployment rate to vary systematically by month in sample—in the Current Population Survey (CPS) has worsened over time. Estimated unemployment rates for earlier rotation groups have grown sharply relative to later rotation groups; both should be nationally representative samples. This bias increased discretely after the 1994 CPS redesign, and rising nonresponse rates are likely a significant contributor. Survey nonresponse increased after the redesign, mirroring the evolution of rotation group bias. Consistent with this explanation, rotation group bias for households that responded in all eight interviews remained stable over time.
Publication Date: 2-May-2017
Citation: Krueger, Alan B, Mas, Alexandre, Niu, Xiaotong. (2017). The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up?. The Review of Economics and Statistics, 99 (2), 258 - 264. doi:10.1162/REST_a_00630
DOI: doi:10.1162/REST_a_00630
ISSN: 0034-6535
EISSN: 1530-9142
Pages: 258 - 264
Type of Material: Journal Article
Journal/Proceeding Title: The Review of Economics and Statistics
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.



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