The official monthly labor force estimates from January
1994 onward will be based on data from a comprehensively
redesigned Current Population Survey (CPS). The redesign
incorporates changes in the basic questionnaire and
collection methods. In addition, these estimates will be
constructed using the 1990-census-based population controls
rather than 1980-census-based population controls.
In order to gauge the effects of the CPS redesign on
published estimates, a Parallel Survey (PS), intended to
provide annual average labor force estimates, was conducted
from July 1992 to December 1993. The PS used a separate
monthly sample of households approximately one-fifth the size
of the regular CPS sample.
Annual average estimates from the PS were compared to the CPS
for 1993. These comparisons provide estimates of the overall
effect of switching to the new questionnaire and collection
methods. This study showed an expected .45 (or rounded to .5)
percentage point increase in the unemployment rate. (For a
general discussion of these results, see the February 1994
issue of Employment and Earnings; for a more detailed
discussion, see Polivka 1994). These results do not provide
an estimate of the effect of switching from the old CPS to
the redesigned CPS, because not all design differences were
accounted for. We have known for some time that at least one
design difference had a measurable effect on the estimated
unemployment rate. That is, the change in the population
controls resulted in an additional .10 percentage point
increase in the unemployment rate; implying a total effect of
.55 (or rounded to .6) on the unemployment rate. (See table
D, The Employment Situation: January 1994.) With the
completion of the PS, it became possible to estimate the
effects of the design differences.
To better understand the effect of design differences between
PS in 1993 and CPS in 1994, the CPS Bridge Team has obtained
estimates of several design differences. Three design
differences, present in January 1994, which we have examined
are: 1) The redesigned CPS uses 1990-census-based population
controls rather than the 1980-census-based controls; 2) The
PS used fewer post-stratification controls than the CPS due
to smaller sample sizes and different sample designs; and 3)
About 18 percent of the PS sample was interviewed at
centralized telephone facilities, as compared to 12.5 percent
in the redesigned CPS.
Accounting for these design differences, the expected
increase in the January 1994 unemployment rate is marginally
greater—.48 percentage point. This estimate, as well as each
of the individual effects given below, are subject to
sampling variance; thus, the actual effects will differ from
the estimated effects.
The specific estimated effects are:
- An increase of .10 percentage point on 1993 CPS due to
the change to 1990-census-based population controls. (The
actual increase in the PS was .12. This is a less accurate
measure due to the smaller PS sample size.)
- An increase of .01 percentage point due to fewer post-stratification
- A decrease of .08 percentage point due to
less centralized interviewing in the new CPS.
Except for the .01 percentage point increase due to fewer
post-stratification controls, the overall effects and the
other individual effects are believed to be statistically
significant; although the centralization effect was
After January 1994, two additional changes will occur. The
composite estimator will be introduced in early 1994, and the
proportion of centralized interviewing will equal the
proportion present in the PS by June 1994. Increasing
centralized interviewing removes the decrease of .08
percentage point present in January to give an expected
increase of .56 percentage point on the unemployment rate.
The effect of the composite estimator is much less certain.
As the composite estimator is introduced, the expectation is
that the unemployment rate may drop by as much as .06
percentage point, or it may increase by .02 percentage point.
Applying the 1993 CPS seasonal adjustment factors to the time
series for the PS and the CPS showed no additional effects.
This is primarily due to use of the same adjustment factors
on both surveys. However, it will take some time before we
know the seasonal pattern for the new CPS.
Additionally, the switch to using 1990-based population
controls will increase the variance on many estimates.
Overall the increases are expected to be small.
Our best estimate of the combined redesign effects on the
annual average unemployment rate is an increase of .56
percentage point. This is before compositing or seasonal
adjustment. It will be awhile before we can determine a more
precise estimate of the effect of compositing or seasonal