Extending the Utility of Federal Data Bases. CPS Labor Force Estimates


The sample sizes shown for CPS in Tables 4-1 through 4-3, both March and monthly, apply to data obtained in a single month of the year. They include the March supplements  income, mobility, work experience, and several other items  and the supplemental information covered in other months, particularly school enrollment and fertility, and voting and registration, which is included every other year. However, CPS collects labor force status each month with the sample size shown for CPS Monthly.

Estimates of annual averages of such items as employment, unemployment, occupation, industry, and related labor force items can be produced by combining data for the 12 months of each year. There is a precedent for such annual averages; for many years CPS has produced annual unemployment rates for the larger states.

The number of observations for annual averages are 12 times the numbers for CPS monthly shown in Tables 3-3 to 3-5, but the effective sample size is lower. The CPS rotation pattern retains households in the sample for a sequence of 4 months, drops them for the next 8 months, and then reinstates them for another 4-month period. As a result, over the course of a year there are multiple observations on most of the sample persons. Furthermore, in the months when a group of sample persons is dropped, most of the sample replacements are neighboring households whose characteristics are usually correlated with the households they replace.

The correlations vary greatly among the labor force items. They are very high for items that tend to persist for most persons over the course of a year, e.g., whether or not in the labor force or employed and for occupation. They are more moderate for unemployment. The U.S. Census Bureau has estimated both the correlations and the effective sample sizes for CPS annual averages.1 The results indicate that the effective sample size for annual estimates of the unemployment rate is five times the monthly sample. For most of the other labor force items, the effective sample size is only twice the monthly sample. Estimates of average annual unemployment rates, thus, will be based on effective sample sizes five times as large as the numbers in Tables 3-6 to 3-8. Estimates of unemployment rates will satisfy reasonable precision requirements for almost all the minority subgroups. The cost of obtaining annual averages will be quite low since public use files are available.


1  Current Population Survey Variance Properties by Gunlicks, Corteville, and Mansur, Proceedings of the Survey Research Methods Section of the 1997 American Statistical Association annual meetings.