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Testing local level labor force and unemployment projections.
1Computer Science Research Department, Lawrence Berkeley Laboratory, University of California, Berkeley 94720.
Demography
|November 1, 1987
Summary
Labor force participation rate projections are accurate for small areas, mirroring national trends. However, unemployment projections require further investigation due to significant errors, necessitating a two-step analysis of state-level data.
Area of Science:
- Demographics
- Labor Economics
- Statistical Modeling
Background:
- Labor force projections are crucial for regional planning and economic analysis.
- Previous models showed success in projecting labor force participation but struggled with unemployment rates.
Purpose of the Study:
- To evaluate the accuracy of labor force and unemployment projections at small area levels.
- To identify reasons for inaccuracies in unemployment projections and suggest improvements.
Main Methods:
- Comparing state-level changes in labor force participation and unemployment rates (1970-1980) with national trends.
- Analyzing state-level occupational mix in relation to unemployment rate changes by race and sex.
Main Results:
- Labor force participation projections demonstrated high accuracy, even for small areas, aligning with national patterns.
- Unemployment projections exhibited significant errors, with no improvement observed when using historical labor force data.
Conclusions:
- National trends effectively approximate local labor force participation rate changes.
- Unemployment projection inaccuracies necessitate further research into state-level demographic and occupational factors.
- Future studies should explore the impact of national change calculation methods on projection accuracy.