US Official Unemployment Rate – The rise in nonresponse

A new academic paper suggests that the unemployment rate appears to have become less accurate over the last two decades, in part because of this rise in nonresponse. In particular, there seems to have been an increase in the number of people who once would have qualified as officially unemployed and today are considered out of the labor force, neither working nor looking for work.

The trend obviously matters for its own sake: It suggests that the official unemployment rate – 6.2 percent in July – understates the extent of economic pain in the country today. That makes intuitive sense. Wage growth is weak, and Americans are pretty dissatisfied with the economy, according to other surveys. The new paper is a reminder that the unemployment rate deserves less attention than it often receives.

Yet the research also relates to a larger phenomenon. The declining response rate to surveys of almost all kinds is among the biggest problems in the social sciences. It’s complicating our ability to understand how people live and what they believe. “It’s a huge issue,” says Alan Krueger, a Princeton economist and one of the new paper’s three authors. (Mr. Krueger, who recently spent two years as the chairman of President Obama’s Council of Economic Advisers, founded the Princeton University Survey Research Center in the 1990s.)

Chosen excerpts by Job Market Monitor. Read the whole story at  A New Reason to Question the Official Unemployment Rate – NYTimes.com.