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Office of Survey Methods Research
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Published Year: 2024
Survey/Program(s): Office of Productivity and Technology
Catalog: Economic Working Paper
WP Number: WP-567
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Why are Measures of Aggregate Hours Worked by the Unincorporated Self-employed So Volatile?
Abstract
Self-employed hours, as measured using the Current Population Survey (CPS), occasionally vary widely from one quarter to the next, and these variations can result in large fluctuations in BLS measures of quarterly labor productivity. In this paper, we examine whether certain aspects of the CPS sample design, including sample weighting, the rotation group framework, imputation methods, and proxy-reporting, are associated with these large variations. We find that volatility in the number of self-employed is much higher when comparing changes in self-employment among workers who are not in the sample in two consecutive quarters compared with those who are in the sample in consecutive quarters. In addition, proxy responses make larger contributions to self-employment growth more often than do self-responses and month-to-month changes in class-of-worker status occurring with transitions between proxy and self-responses in the CPS panel contribute to increased volatility. Finally, imputed self-employment is more volatile than nonimputed self-employment, but there are few imputed responses.