Research series on labor force status flows from the Current
Population Survey
Each month, the Bureau of Labor Statistics (BLS) reports the number of
people employed, unemployed, or not in the labor force as estimated from
the Current Population Survey (CPS). The net changes in the number of
people employed and unemployed from month to month are important gauges of
the health of the U.S. job market. Underlying these relatively small net
changes, however, is a great deal more churning. Millions of individuals
move between employment and unemployment each month, and millions of
others enter or leave the labor market. In addition, people move into and
out of the survey universe of the civilian noninstitutional population age
16 and over; each month, for example, some people turn age 16. Information
on these labor force status flows (commonly referred to as gross flows)
can provide additional insight into current labor market developments and
help analysts pinpoint the nature of the net changes in employment and
unemployment.
The CPS can provide labor force flow data because households are
interviewed for several months in a row. In any month, about
three-quarters of the households in the survey also would have been
interviewed the previous month. This month-to-month overlap allows the BLS
to track individuals who change labor force status from one month to the
next.
In a given month, a person is in one of three labor force states:
employed (E), unemployed (U), or not in the labor force (N). The following
month, the person could either have the same status or change to one of
the other two states. Thus, one can express the complete set of labor
force flows with the following 3 x 3 matrix.
Labor force status flows
|
Status in current month |
Status in prior month
|
Employed |
Unemployed |
Not in labor force |
Employed
|
EE |
EU |
EN |
Unemployed
|
UE |
UU |
UN |
Not in labor force
|
NE |
NU |
NN |
The notation of the matrix is such that the first letter of each flow
denotes the labor force status of an individual in the previous month, and
the second letter of each flow denotes the state of an individual in the
current month. The diagonal elements (i.e., EE, UU, NN) represent
individuals who did not change their labor force status over the month.
(Not shown in this matrix are flows into and out of the civilian
noninstitutional population age 16 and over.)
The flows into employment, listed in the first column, represent all
individuals who remained employed, but not necessarily with the same
employer, over the month (EE), the number of unemployed persons who became
employed (UE), and the number of persons previously not in the labor force
who became employed (NE). The flows into unemployment, listed in the
second column, represent the number of employed who become unemployed
(EU), the number of unemployed who remained unemployed from the previous
month (UU), and the number of individuals not in the labor force who
became unemployed (NU). Finally, the flows out of the labor force, listed
in the third column, represent the number of previously employed
individuals who leave the labor force (EN), the number of previously
unemployed individuals who leave the labor force (UN), and the number of
individuals who remained out of the labor force (NN).
Labor force flow data have been available from the CPS for decades;
however, discrepancies existed between the labor force changes derived
from the flows and the net changes derived from the monthly stock
estimates. For this reason, the flow data have not been published on a
continuous basis since 1952. To make the data more useful, BLS researchers
developed methods to reconcile the flows and stock data and to seasonally
adjust the flows. For more information on the development of the improved
labor force status flows, see Harley J. Frazis, Edwin L. Robison, Thomas
D. Evans and Martha A. Duff, Estimating gross flows
consistent with stocks in the CPS, Monthly Labor Review, September
2005, pp. 3-9.
These research labor force flows allow data users to analyze the
movements that underlie the net over-the-month changes in employment,
unemployment, or not in the labor force. For example, examining the flows
would show whether a drop in unemployment over the month was due to an
increase in the number of unemployed people becoming employed (the UE
flow) or to an increase in the number of unemployed people leaving the
labor force entirely (the UN flow). The historical series on labor force
flows also allow for longer-term analysis which should be useful for
business cycle comparisons. During a labor market slowdown, for example,
the number of people remaining unemployed from one month to next (the UU
flow) will increase.
The labor force flows can provide information from different
perspectives. The examples above focused on examining the data in terms of
the current month, that is, from which labor force status individuals
came, often referred to as inflows. However, assessments also can focus on
what happens to persons in a particular labor force category, such as the
flow of individuals out of unemployment. This latter type of assessment
(using total unemployment as the base) sheds light concerning the
likelihood of individuals leaving their current state of unemployment and
finding employment, remaining unemployed, or leaving the labor force. For
more information on the usefulness of labor force status flows in
analyzing changes in labor force measures, see Randy Ilg, Analyzing CPS data using
gross flows, Monthly Labor Review, September 2005, pp. 10-18.
These research labor force flow estimates are made
available through the BLS website.1 Three products are
updated each month. The first table (cps_flows_current.pdf)
shows all the labor force status flows that are developed under the new
methods. This includes the 9 core flows that track the movement of
people between employment, unemployment, and out of the labor force. For
example, the table shows the number of people who moved from employment to
unemployment and the number who moved from unemployment to employment. In
addition to the core flows, the table also shows the flows of people
into and out of the scope of the survey, that is, the movement of people
into and out of the civilian noninstitutional population age 16 and over.
This table allows data users to see how the sum of all the flows equal the
levels of employment, unemployment, and not in the labor force for both
the current and previous month. The second table (cps_flows_recent.pdf) shows
the flows into the three major labor force categories (employment,
unemployment, and not in the labor force) for recent months, allowing
users to see how the flows have changed over those months. The third
product is a data file (cps_flows_history.pdf, cps_flows_history.txt,
cps_flows_history_format.txt
) containing the time series of the major labor force status flows from
February 1990 through the most recent month available.
The historical labor force flows file was originally issued with data back to February 1994. Effective May 2, 2008, labor force status flows series derived from the Current Population
Survey were extended to include the February 1990 to January 1994 period. In addition, the
seasonally adjusted series from February 1994 to February 2008 were revised to incorporate
minor adjustments in the seasonal adjustment methodology.
Due to the major redesign in the Current Population Survey in January 1994, labor force
flows for that month could not be estimated in the usual manner. A change in the way that
households were identified in the CPS microdata made it impossible to link households from
December 1993 to January 1994; thus all values for labor force flows (including individuals
turning 16) were unavailable. In order to generate unadjusted estimates for January 1994,
statistical models were fit to each of the existing historical series. The resulting estimated
values were then used in the seasonal adjustment process to produce seasonally adjusted series
back to February 1990.
Read more analysis of labor force flow data. For more information about the research series on labor force flows
and the data products, contact the Division of Labor Force Statistics
at 202-691-6378 or by
email.
1 These estimates are subject to revisions due to updated population controls and revised seasonal
adjustment factors.
Last Modified Date: May 4, 2008