Chapter 1.
Labor Force Data Derived from the Current Population
Survey
Estimation Methods
Under the estimating methods used in the CPS, all of the
results for a given month become available simultaneously and
are based on returns from all respondents. The estimation
procedure involves weighting the data from each sample person
by the inverse of the probability of the person being in the
sample. This gives a rough measure of the number of actual
persons that the sample person represents. Since 1985, most
sample persons within the same State have had the same
probability of selection.
Some selection probabilities may differ within a State due to
the sample design or for operational reasons. Field subsampling,
for example, which is carried out when areas selected for the
sample are found to contain many more households than expected,
may cause probabilities of selection to differ for some sample
areas within a State. Through a series of estimation steps
(outlined below), the selection probabilities are adjusted for
noninterviews and survey undercoverage; data from previous
months are incorporated into the estimates through the composite
estimation procedure.
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Noninterview adjustment. The weights for all
interviewed households are adjusted to account for occupied
sample households for which no information was obtained because
of the occupants' absence, impassable roads, refusals, or
unavailability of the respondents for other reasons.
This noninterview adjustment is made separately for clusters
of similar sample areas that are usually, but not necessarily,
contained within a State. Similarity of sample areas is based on
Metropolitan Statistical Area (MSA) status and size. Within each
cluster, there is a further breakdown by residence. Each MSA
cluster is split into "central city" and "balance of the MSA."
Each non-MSA cluster is split into "urban" and "rural" residence
categories. The proportion of sample households not interviewed
varies from 7 to 8 percent, depending on weather, vacation times,
and so forth.
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Ratio estimates. The distribution of the population
selected for the sample differs by chance from that of the
population as a whole in such characteristics as age, race, sex,
ethnicity, and State of residence. Because these characteristics
are closely correlated with labor force participation and other
principal measurements made from the sample, the survey estimates
can be substantially improved when weighted appropriately by
the known distribution of these population characteristics. This
is accomplished through two stages of ratio adjustment, as
follows:
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First-stage ratio estimation. The purpose of the first-stage
ratio adjustment is to reduce the contribution to variance of
selecting a sample of PSUs rather than drawing sample households
from every PSU in the Nation. This adjustment is made to the CPS
weights in two race cells: black and nonblack; and two age cells:
0 to 15 years and 16 years and older; it is applied only to data
from PSUs that are not self-representing and for those States
that have a substantial number of black households. The procedure
corrects for differences that existed in each State cell at the
time of the 2000 census between 1) the race distribution of the
population in sample PSUs and 2) the race distribution of all
PSUs. (Both 1 and 2 exclude self-representing PSUs.)
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Second-stage ratio estimation. This procedure substantially
reduces the variability of estimates and corrects, to some
extent, for CPS undercoverage. The CPS sample weights are
adjusted to ensure that sample-based estimates of population
match independent population controls.
Beginning in 2003, the second-stage weighting has new
coverage steps "0A" and "0B" that are followed by an iterative
raking process. California and New York are split into substate
areas, and 53 states/areas are used in Step 0B and Step 1
(Los Angeles-Long Beach metropolitan area; balance of
California; New York City; balance of New York; the other
48 states; and the District of Columbia.)
The noniterated National Coverage Step 0A is added primarily
to improve the efficiency of adjustment for subpopulations that
are prone to undercoverage. Step 0A also provides some control
for Asian race that could not be included in the iterated steps.
The noniterated State Coverage Step 0B is designed to adjust for
race/gender/age coverage differences between the states.
Race is limited to black and nonblack, and there is no ethnicity
component in the step.
The three iterated steps adjust sample weights to the
following control groups:
- State step — 6 gender x age cells defined for 53
states/areas
- Ethnicity step — 26 Hispanic and 26 non-Hispanic gender x
age cells
- Race step — 34 white-only, 26 black-only, and 26 Asian-only
and residual gender x age cells
The independent population controls are prepared by
projecting forward the resident population as enumerated on April
1, 2000. The projections are derived by updating demographic
census data with information from a variety of other data sources
that account for births, deaths, and net migration.
Subtracting estimated numbers of resident Armed Forces
personnel and institutionalized persons reduces the resident
population to the civilian noninstitutional population.
Composite weighting procedure. The last step in the
preparation of most CPS estimates makes use of a composite
estimation procedure. Composite estimates are created as a
weighted average of two factors: (1) The two-stage ratio
estimate based on data from the entire sample for the current
month; and (2), the composite estimate for the previous month,
adjusted by an estimate of the month-to-month change based on
the six rotation groups common to both months. A bias adjustment
term is added to the weighted average to reduce variance and
partially account for bias associated with month-in-sample
estimates. This month-in-sample bias is exhibited by
unemployment estimates for persons in their first and fifth
months in the CPS that are generally higher than estimates
obtained for the other months.
These composite estimates are then used as controls in the
composite weighting procedure. Both employment and unemployment
are controlled in each defined cell, and not-in-labor-force
(NILF) is controlled as a residual. The iterative procedure is
similar to that used for second-stage weighting:
- State step — a single CPS16+ cell is used for 53
states/areas
- Ethnicity step — 10 Hispanic and 10 non-Hispanic gender x
age cells
- Race step — 22 white-only, 14 black-only, and 10 Asian-only
and residual gender x age cells
Composite estimation results in a reduction in the sampling
error beyond that which is achieved through the two stages
of ratio estimation. For some items, the reduction is
substantial. The resultant gains in reliability are greatest
in estimates of month-to-month change, although gains also are
usually obtained for estimates of level in a given month,
change from year to year, and change over other intervals of
time.
Next: Seasonal Adjustment
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