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The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up?

Alan Krueger, Alexandre Mas and Xiaotong Niu
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Xiaotong Niu: Congressional Budget Office

The Review of Economics and Statistics, 2017, vol. 99, issue 2, 258-264

Abstract: We document that rotation group bias—the tendency for the unemployment rate to vary systematically by month in sample—in the Current Population Survey (CPS) has worsened over time. Estimated unemployment rates for earlier rotation groups have grown sharply relative to later rotation groups; both should be nationally representative samples. This bias increased discretely after the 1994 CPS redesign, and rising nonresponse rates are likely a significant contributor. Survey nonresponse increased after the redesign, mirroring the evolution of rotation group bias. Consistent with this explanation, rotation group bias for households that responded in all eight interviews remained stable over time.

Date: 2017
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Working Paper: The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up? (2014) Downloads
Working Paper: The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up? (2014) Downloads
Working Paper: The Evolution of Rotation Group Bias: Will the Real Unemployment Rate Please Stand Up? (2014) Downloads
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The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

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