is simulated to begin work in October.) After all weeks for the period have been allocated, the probabilities are recomputed and the process is repeated until all weeks in the year have been allocated. As much as possible, periods of employment and unemployment are interspersed when an individual reports having more than one employer or more than one spell of unemployment.
The monthly indexes referred to above are calculated based on data, from the Bureau of Labor Statistics’s (BLS) publication Employment and Earnings, on the total numbers of employed and unemployed people by month. The allocation program calculates a target number of total weeks working, unemployed, and not in the labor force per month such that the simulated patterns in the March CPS database will follow the monthly trends in the BLS data. As each individual’s weeks are allocated, the target totals are diminished, and new indexes are computed every 1,000 records based on the new totals.
MATH
The general procedure that the ALLOY routine uses to allocate weeks worked, weeks unemployed, and weeks out of the labor force is as follows. First, months of work and months of unemployment are calculated by dividing weeks worked and weeks unemployed, respectively, by 4.333, and rounding the results up or down to whole months. Months out of the labor force are calculated as 12 minus months worked minus months unemployed. Then monthly employment status is determined. Members of the armed forces are assumed to work all year. People who worked part of the year and who were otherwise out of the labor force have their months worked allocated starting in a random month and continuing until the months are exhausted; remaining months are coded as out of the labor force. The allocation process wraps around to the first months of the same year, if necessary. People who worked part of the year and who also reported unemployment are subject to a random determination of whether months worked or months unemployed are allocated first. Months worked (unemployed) are then allocated starting in a randomly chosen month, followed by months unemployed (worked), with remaining months coded as out of the labor force. Again, the months wrap around as necessary.
The allocation procedures are modified for spouses in husband-wife families where both spouses worked part of the year. In these instances the spouse is assigned a random starting month for his or her months worked in a manner that constrains the spouse’s period of work to overlap that of the head by at least 1 month. This procedure is based on findings from the ISDP that indicated, contrary to earlier assumptions, that the spouse’s work periods tend to coincide with the head’s work periods rather than the head’s unemployment periods.
However, in the current version of ALLOY, this modification is implemented only for husband-wife families that are not simulated to receive benefits from AFDC. For families simulated as participants, ALLOY uses different
