Measuring Heterogeneity in Job Finding Rates among the Non-Employed Using Labor Force Status Histories

Marianna Kudlyak and Fabian Lange

No 2017-20, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We construct a novel measure of the duration of joblessness using the labor force status histories in the four-month CPS panels. For those out of the labor force (OLF) and the unemployed, the job finding rate declines with the duration of joblessness. This duration measure dominates other existing measures in the CPS for predicting transitions from non-employment to employment. For those OLF, the variation in job finding rates explained by the duration of joblessness is five times larger than the variation explained by the self-reported desire to work or reasons for not searching. For the unemployed, the job finding rate declines with the self-reported duration of unemployment only to the extent that this variable correlates with the duration of joblessness. The two duration measures are not equivalent, and the discrepancy between them is not a classification error. Instead, the self-reports of unemployment durations refer to how long the respondent looked for work, often disregarding short-term jobs or including periods of employment while searching. Using our novel measure, we provide new estimates of the duration distribution of the unemployed and reexamine current approaches to misclassification error in the CPS.

JEL-codes: E24 E32 J30 J41 J63 J64 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2018-01-22
New Economics Papers: this item is included in nep-lab and nep-mac
Note: The first version of this paper was published May 20, 2014. A revision to this paper was published September 14, 2017.
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Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Measuring Heterogeneity in Job Finding Rates among the Nonemployed Using Labor Force Status Histories (2015)
Working Paper: Measuring Heterogeneity in Job Finding Rates Among the Nonemployed Using Labor Force Status Histories (2014)
Working Paper: Measuring Heterogeneity in Job Finding Rates Among the Nonemployed Using Labor Force Status Histories (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedfwp:2017-20

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DOI: 10.24148/wp2017-20

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