Press Release Government Inequality US

Non-Response Bias May Underestimate Unemployment, Particularly Among Young Black Men

March 03, 2021

Contact: Karen Conner, 202-281-4159Mail_Outline

Washington, DC ― A new study published by The Institute for New Economic Thinking (INET) unpacks a pivotal issue relating to the high and rising non-response rate in the Current Population Survey (CPS) and how the non-response bias would affect less advantaged workers over the 2003–2019 period.  The CPS is the underlying source of many official labor market statistics, as well as income and poverty measures, and health insurance coverage. 

In the study, “Masking Real Unemployment: The Overall and Racial Impact of Survey Non-Response on Measured Labor Market Outcomes,” coauthors CEPR Economist Yixia Cai and Senior Economist Dean Baker find that younger respondents and non-white respondents are considerably more likely to be missed in the following month if they appear in the current month’s survey. The missing rates for most demographic groups tend to grow over time. The authors also find that unemployed people in the current month are considerably more likely to be missing in a subsequent survey. 

After correcting non-response and undercoverage issues, Cai and Baker find that the national unemployment rate would be 0.7 percentage points higher than the Bureau of Labor Statistics (BLS) measure for the years 2003 to 2019. The unemployment rate for Black men is, on average, 2.8 percentage points higher than the BLS measure. Black women’s unemployment rate is understated by about 2.4 percentage points. For Black men ages 16 to 24 and ages 25 to 34, the adjusted differences are much larger, at 3.6 and 3.0 percentage points, respectively. The unemployment rate for Hispanic workers is also downplayed by 1.5 percentage points. 

The findings of this study are somewhat consistent with recent research that has raised questions about the Current Population Survey’s accuracy in certain areas. As the study explains, “There is renewed interest in determining the real labor market hardships faced by many in the United States despite its strong economy. The government’s surveys play a central role in providing information on this topic.”

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