Estimating Gross Labor-Force Flows

We present and apply an adjustment procedure for the Bureau of the Census and Bureau of Labor Statistics gross labor-force flows data that addresses two major defects in the data. First, an adjustment procedure is developed to take account of individuals with missing labor-force classifications who are not missing at random. Second, we provide a procedure for adjustment for individuals with spurious labor-force transitions arising because of classification errors in either the current or the previous Current Population Survey. Our procedures are applied to compute adjusted monthly gross change data for the period January 1977–December 1982. The average adjustment for nonrandom missing classifications ranges from –12% to 15% of the unadjusted gross change data. The average adjustment for spurious labor-force transitions reduces estimated movements by 8%–49%. The classification adjustment also increases estimated consecutive periods of unemployment by 18%. We apply several internal and external consistency checks to our procedure. In general, the adjustments appear reasonable. We also suggest some modifications of Current Population Survey procedures that could reduce the use of ex post adjustment procedures in the future.