----- Original Message ----- From: "Erik Reuter" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[EMAIL PROTECTED]> Sent: Sunday, March 21, 2004 8:17 PM Subject: Re: Race to the Bottom
> > First, the structural changes. I looked at two measures of employment, > the establishment survey (non-farm payrolls) and the household survey > (civilian employment). As suggested by the name, the payrolls measure > is more widely accepted; however, the household survey could be a > better measure since it actually surveys households rather than drawing > conclusions from official payroll data. For example, in the recent > booming homebuilding market there are many opportunities for people > to work "off the books" and be paid surreptitiously -- such people > would likely be counted in the household survey but definitely not the > establishment survey. This is an interesting question. On the face of it, your arguement is intuative, but there are other factors involved. People who work in housing, but are not "on the books" are usually (or at least often) illegal immigrants. They tend to eschew filling out government forms and surveys. Other people who are working "off the books" would also have incentives to not report those jobs. The people who are in drug sales comes to mind here. Second, the household survey contains a number of different catagories. One would think that variations of "working for a family business" and "self employed" would contain a significant fraction of the job growth missed by the household survey. That has not been found to be true. Third, the household survey employment number is dependant on the estimated growth in population. The Federal Reserve believes that this number has been over estimated. We have a quote on this from Brad DeLong's website: http://www.j-bradford-delong.net/movable_type/2004_archives/000343.html#000343 <quote> Note: The Fed's View on the Household vs. the Payroll Employment Survey Population growth estimates, immigration, and the household vs. payroll employment survey: The Federal Reserve's view: Economic View: Two Tales of American Jobs: ...the Federal Reserve has just thrown cold water on the household data. It concludes that the gloomy payroll data is essentially accurate and that the household survey is probably off base. "I wish I could say the household survey were the more accurate,'' Alan Greenspan, the Fed chairman, said in his testimony at a House hearing on Feb. 11. "Everything we've looked at suggests that it's the payroll data which are the series which you have to follow.'' To test the self-employment theory, the Fed adjusted the household survey by taking out all the kinds of workers who do not show up on the payroll survey - self-employed people, but also farm workers and family workers in family-run companies. Even then, Mr. Greenspan said, the discrepancy remains large. The Fed's conclusion was that the household survey's results have been inflated by overestimates of population growth. Because the household survey is a sample, the Bureau of Labor Statistics infers the total change in jobs by multiplying the ratio of employed to unemployed workers in the household survey by its estimate of the total population. If the population estimate is too high, the estimated number of jobs will also be too high. The Bureau of Labor Statistics bases its population estimate on the 2000 census, but it updates that estimate yearly with data on births, deaths and immigration. Immigration numbers are largely guesswork, however, because so much immigration is illegal. Fed officials suspect that the immigration estimate is inflated, because it fails to reflect tighter immigration controls after Sept. 11, 2001, as well as declines caused by the economic slowdown... <end quote> I think that the overestimation of the population growth is a good candidate for a source of overestimation of the employment growth by the household survey. Further, while I think appeal to experts is an inferior proof to appeal to rigorous analysis of data, it is still worthwhile to note that the Federal Reserve's analysis is a decent data point. Greenspan tends to be fairly conservative in stating what he knows, so that adds to the verisimilitude of this claim. BTW, I appreciate the work you've done on this. I've been overwhelmed with RL things to do, but I'll try to add more analysis in the days ahead. Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
