A new GLO Discussion Paper finds that the non-response rise in the important US CPS data set is caused largely by partially-responding households. The rising refusals artificially suppressed the measured labor force participation rate, among other effects.
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GLO Discussion Paper No. 781, 2021
How Does the Dramatic Rise of CPS Non-Response Impact Labor Market Indicators? – Download PDF
by Bernhardt, Robert & Munro, David & Wolcott, Erin
GLO Fellow David Munro
Author Abstract: Since 2010 and before the pandemic hit, the share of households refusing to participate in the Current Population Survey (CPS) tripled. We show that partially-responding households – households that respond to some but not all of the survey’s eight panels – account for most of the rise. Leveraging the labor force status of partially-responding households in the months surrounding their non-response, we find that rising refusals artificially suppressed the labor force participation rate and employment-population ratio but had little discernible effect on the unemployment rate. Factors robustly correlated with state-level refusal rates include a larger urban population, a smaller Democratic vote share (our proxy for sentiment towards government), and the economic and social changes brought about by manufacturing decline.
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