Determination of Monthly Labor Force and Employment Status
Input Data
The March CPS public-use files provide, for each person 15 years of age and older at the time of the March supplement interview, the following items pertaining to labor force and employment status during the preceding calendar year, which are used by one or more of the three models:
number of weeks worked in year,
number of weeks unemployed (not working but looking for work or on layoff) in year,
number of employers in year,
number of spells of unemployment in year, and
hours normally worked per week.
In addition, the number of weeks not in the labor force in year can be calculated as 52 minus weeks worked minus weeks unemployed.
TRIM2
The MONTHS routine first allocates weeks worked, weeks unemployed, and weeks not in the labor force across the year and then allocates the income variables in proportion to weeks worked, weeks not worked, or simply by dividing by 12. The actual allocation of labor force status is performed outside of TRIM2. An extract file is created that contains all people who were in the labor force at any time during the year. The file is sorted by weeks worked in descending order and then on a random number, so that those people with the least flexibility for allocation will be considered first. Next, each individual’s weeks worked, weeks unemployed, and weeks not in the labor force are divided into smaller periods based on the number of employers, the number of unemployment spells, and the total number of weeks in each status.
The allocation process for each individual begins by selecting a random month in the year to start. A probability is calculated for each of the three possible labor force statuses by multiplying an individual’s probability of being in that status by the index for that status in that month. (Although not described in the documentation, the individual’s probability is presumably a function of the number of weeks in each status; the monthly indexes for each status are discussed below.) Next, a random number is chosen to select a status based on the probabilities. A period of that type is then allocated to the weeks of the month (all months are assumed to last 4.333 weeks) and continuing into succeeding months until all weeks in that period have been exhausted. (The allocation wraps around to the first months of the same year if necessary—for example, in the case in which someone who worked at a job for 6 months
