New visualizations capture crucial measure of health of labor market

April 21, 2014 — In three new data visualizations, Remapping Debate offers a comprehensive portrait of the labor market from January 2007 to the present for dozens of demographic composites, each specifying race or ethnicity, sex, age, and educational attainment.  These visualizations highlight a crucial measure of the health of the labor market — the labor force participation rate. They also allow you to explore the interrelations between various labor force variables — such as unemployment, full-time employment, and part-time employment — and to track the composition of the labor force through the recession and recovery.

Often, the only labor force variable that makes it into press accounts is the unemployment rate. While important, this does not offer a full picture of the state of the labor force. Many economists consider the labor force participation rate — which is the percentage of the working-age population that is either employed or actively looking for work — to be just as important in assessing the state of the labor market as the unemployment rate. Like the unemployment rate, the labor force participation rate also varies greatly depending on demographic factors.

In these visualizations, Remapping Debate allows you to see the relationship between employment (full- and part-time), unemployment, and absence from the labor force. When the unemployment rate drops, for example, it often does not signify a commensurate gain in full-time employment, but may instead mean an increase in part-time employment, or even that people have dropped out of the labor force altogether.

These data come from the Current Population Survey of the U.S. Census Bureau (the same data used by the Bureau of Labor Statistics to compute the unemployment rate each month). In order to avoid seasonal fluctuations in the data and reduce the margin of error, we have computed 12-month moving averages of all the variables, meaning that the results reported for a given month represent the average of that month and the preceding 11 months. Thus, for example, the first month represented in the visualization is January 2007, comprising a moving average of the months from February 2006 through and including January 2007. Sampling error has been calculated for all data points using methodology from the BLS.

The first visualization, below, allows you to track the changes in the composition of the civilian, non-institutional working-age population for a single demographic composite over more than seven years, the latest data coming from March of this year.

Select a demographic composite using the dropdown filters for race, sex, age, and educational attainment. If you hover over a colored band with your mouse, you will be able to view the percentage of the population of that demographic composite represented in that labor force category, as well as the associated margin of error.

In the preset example below — Black, Non-Hispanic women between the ages of 26 and 40 with a high school degree — the 12-month moving average of the percentage of the civilian, non-institutional working-age population that is employed full time has fallen from 59.85 percent in January 2007 to 47.86 percent in March 2014. A rise in unemployment only accounts for 3.32 percentage points of that drop, with a rise in part-time employment accounting for 5.04 percentage points and a further 3.63 percent of the population dropping out of the labor force altogether. Thus the transition from full-time employment to part-time employment has been a larger factor, in percentage terms, than the rise in unemployment for this composite during the recession and recovery, a dynamic overlooked by a focus on the unemployment rate alone.

Notes: The sampling error for some composites was too large to be considered reliable, and data for those categories have been excluded from this visualization. The “Unemployed” category in this visualization does not correspond to the commonly reported unemployment rate. The denominator in the calculation in this visualization is the civilian, non-institutional working-age population, while the denominator of the unemployment rate is the civilian labor force.