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June 02, 2005

Social Causation and Discouraged Workers

Early in March 1980, about 100 of us Harvard sophomores began carrying around--everywhere we went--a large book with a bright red cover, and the word "SUICIDE" emblazoned on the front in large black letters.

It had been--as it always is in Cambridge, Massachusetts--a miserable winter: not cold enough for the snow to be a constant delight, but just a wet garbage-filled slushness. The absence of sun had given us all seasonal affective disorders. And we were desperate for spring and sunlight to come as we opened our copies of our books and smeared turkey tetrazini from the Leverett House dining hall across the table of contents.

To make things worse, our roommates and passers-by used the books we carried as an opportunity for jokes: "Don't do it, Brad! You still have plenty to live for!" was about as good as it got.

What we were reading, of course, was Emile Durkheim's Suicide. As we were taught the book, Durkheim was attempting two very important things:

  1. A critique of classical liberal modernity, as tending to cause a great deal of distress as people found themselves severed from their communities and turned into isolated Benthamite machines or, more optimistically, Millian agents.
  2. A stunning demonstration of the power of sociology: nobody about to commit suicide will say "I'm doing this because I'm Protestant and not Catholic" or "I'm doing this because I live in a big city rather than a small town," and yet suicide rates exhibit powerful variation in response to standard sociological variables. What the sociological background is can provide the extra push that makes the normal (or abnormal) stresses of life unbearable, or can provide the extra support that makes the unbearable bearable.

It is for this reason--call it social causation--that I find unconvincing Andrew Samwick's argument that because people don't say that the primary reason they're dropping out of the labor force is because jobs are hard to find that we can therefore conclude that people aren't dropping out of the labor force because jobs are hard to find:

Vox Baby: Re-critiquing Krugman, with Friends: What generated the several posts of mine last fall was my attempt to figure out the extent to which the decline in the unemployment rate is due to the fact that 'some of those without jobs stopped actively looking for work, and therefore dropped out of the unemployment statistics'.... I considered the three usual augmented measures of the unemployment rate that the BLS tabulates in Table A-12 each month that specifically track those who are not in the labor force because they are not actively looking for work....

  • Unemployment Rate: Fell from 6.3 to 5.4 percent
  • UR, Incl. discouraged workers: Fell from 6.6 to 5.7 percent
  • UR, Incl. discouraged and other marginally attached workers: Fell from 7.2 to 6.4 percent
  • UR, Incl. marginally attached workers and those employed part-time for economic reasons: Fell from 10.3 to 9.4 percent

Subsequent exchanges with readers and with some helpful folks at the BLS revealed that the BLS also collects information monthly on those who are not in the labor force but want a job, even if they have not searched recently enough and/or are not currently available to work. So we could add another bullet point (from my last post in the series in October) to include these people:

  • UR, Incl. any who wants a job: Fell from 9.2 to 8.4 percent

Even measures of the unemployment rate that are specifically designed to pick up people who are out of the labor force because they stopped actively looking for work declined over the period in question. All of them fell by 0.8 - 0.9 percentage point, compared to the decline of 0.9 percentage point in the official unemployment rate. I don't even get 'primarily' from this...

I am not convinced by Andrew. Falling unemployment rates with roughly constant employment-to-population ratios and disappointing real wages seems to me more consistent with the hypothesis that discouragement is pushing more people across the psychological line that leads them to drop out of the labor force, people who when asked what is their primary reason for leaving say that it is to get more schooling or have a kid or just take some time off.

On the other hand, he is not convinced by me. And he's right to some degree at least: I should be worried by the fact that the Labor Department's attempts to pick up this phenomenon that I believe is going on do not succeed in doing so.

Posted by DeLong at June 2, 2005 11:30 AM