Wednesday, December 29, 2010

BLS Change on Unemployment Duration

by Calculated Risk on 12/29/2010 02:47:00 PM

To make this clear (since I mentioned this change earlier): This change will have no impact on the number of unemployed or the unemployment rate. This will only impact the average duration of unemployment.

From the BLS: Changes to data collected on unemployment duration

Effective with data for January 2011, the Current Population Survey (CPS) will be modified to allow respondents to report longer durations of unemployment. Presently, the CPS accepts unemployment durations of up to 2 years; any response of unemployment duration greater than this is entered as 2 years. Starting with data for January 2011, respondents will be able to report unemployment durations of up to 5 years. This change will likely affect estimates of average (mean) duration of unemployment. The change will not affect the estimate of the number of unemployed persons and will not affect other data series on the duration of unemployment.
Currently if someone says they have been unemployed longer than 2 years, they are listed at 2 years (the current maximum). This new change will allow for responses up to 5 years and will probably have a small impact on the average (mean) duration of unemployment, but will have no impact on the median duration - or on the number unemployed or the unemployment rate.