May 31, 2014
Tyler Cowen had an interesting column discussing a book by Alice Goffman that described the life of people trying to evade the law. Cowen points out that fugitive status undermines family relations and can make normal work impossible.
The discussion is interesting and the book sounds well worth reading, but as an economist nerd type it is difficult not to ask a seemingly obvious question; do these people answer government surveys? Of course fugitives almost certainly do not answer the door for the people conducting the Current Population Survey (CPS) and other government surveys.
This matters because it could mean that the data from the CPS (the main survey for determining employment and unemployment rates) are biased, especially for those demographic groups who are disproportionately likely to be in trouble with the law. This likely appears to be the case with young African American men. While the overall coverage rate for the CPS is around 88 percent, for young African American men it is around two-thirds.
The current methodology effectively assumes that the people who don’t get covered by the survey are as likely to be employed as the people who do. Based on comparisons between the 2000 long-form Census and the overlapping months of the CPS, my colleague John Schmitt found that the CPS may overstate employment rates for young African American men by as much as 8 percentage points.
By its nature is hard to get a clear fix on the size of this problem, but it does seem reasonable that not only actual fugitives, but people on probation or parole or in other ways involved with the criminal justice system might be less likely to talk with someone asking questions from the government. If we think these people are less likely to be employed, then our data may be overstating employment and understating unemployment. It would be good if the Bureau of Labor Statistics took some interest in this issue.