The labor market of the United States is dynamic and flexible, changing as people enter and exit it or change jobs within it. And, as the overall structure of the U.S. economy continues to shift, from a manufacturing base to a service-oriented base, so does the demand for particular types of labor.2 Data on spells of unemployment provide an insight into how easily the market allows people to make these transitions and respond to shifts in labor demand.
1 SIPP is a longitudinal panel survey that interviews a representative sample of U.S. households every 4 months. The population represented (the population universe) is the civilian noninstitutionalized population of the United States. The core content of SIPP identifies demographic characteristics, labor force participation, government program participation, and various income sources of respondents in sampled households. The longitudinal estimates presented here are based on people who were interviewed in all waves of the reference period, or for whom imputed information exists. Efforts were made during the life of the panel to ensure that the sample remained representative of the noninstitutional population of the United States. If the people included in the estimates have different experiences of employment and unemployment than the people who did not respond initially, left the sample, or missed two or more consecutive waves, these longitudinal estimates may be biased. The panel consists of four rotations interviewed in consecutive months. For rotations with missing data at the beginning of 1996 or end of 1999, imputations were made on the basis of the closest month of data available. Rotation 3 had 1 month of data imputed in 1996, rotation 4 had 2 months imputed in that year, and rotation 1 had 1 month of imputed data in 1999.
2 For a more thorough discussion of U.S. economic structural change and its relationship to changing labor demands, see Kevin Murphy and Finis Welch, "Industrial Change and the Rising Importance of Skill," pages 101-132 in Uneven Tides: Rising Inequality in America, Sheldon H. Danziger and Peter Gottschalk, eds., 1993, and George E. Johnson, "Changes in Earnings Inequality: The Role of Demand Shifts," pages 41-54 in Journal of Economic Perspectives, Spring 1997.