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

Alan B. Krueger; Alexandre Mas; Xiaotong Niu

doi:10.1162/rest_a_00630

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

Alan B. Krueger¹; Alexandre Mas¹; Xiaotong Niu²

¹ Princeton University · ² Congressional Budget Office

The Review of Economics and Statistics 2017 open access

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.

DOI: 10.1162/rest_a_00630
Volume: 99 (2)
Pages: 258-264
Language: en
Export: BibTeX
Sources: openalex crossref