Adjusted Employment-to-Population Ratio as an Indicator of Labor Market Strength

26 Pages Posted: 4 Apr 2015

See all articles by Julie L. Hotchkiss

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta; Georgia State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 1, 2014

Abstract

As a measure of labor market strength, the raw employment-to-population ratio (EPOP) confounds employment outcomes with labor supply behavior. Movement in the EPOP depends on the relative movements of the employment rate (one minus the unemployment rate) and the labor force participation rate. This paper proposes an adjustment to the calculation of the EPOP using individual microdata to account for both individual characteristics and the probability of labor force participation, which can used to assess the strength of the labor market.

Keywords: EPOP, employment-to-population ratio, labor force participation, unemployment rate, employment rate, structural versus cyclical

JEL Classification: J64, J21, J11

Suggested Citation

Hotchkiss, Julie L., Adjusted Employment-to-Population Ratio as an Indicator of Labor Market Strength (August 1, 2014). FRB Atlanta Working Paper No. 2014-8. Available at SSRN: https://ssrn.com/abstract=2580339 or http://dx.doi.org/10.2139/ssrn.2580339

Julie L. Hotchkiss (Contact Author)

Federal Reserve Bank of Atlanta ( email )

Research Department
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8198 (Phone)
404-498-8058 (Fax)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

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