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Dynamics of Economic Well-Being: Spells of Unemployment, 2004–2007

Report Number P70-120
Thomas Palumbo

The U.S. labor market is dynamic and flexible—constantly changing as people enter it, leave it, or change status within it. This report, which looks at the incidence and length of spells of unemployment among various demographic groups, provides insights into the efficiency of the labor market in responding to shifts in the economy and in the society at large.

This report uses longitudinal data from the 2004 panel of the Survey of Income and Program Participation (SIPP) on how often and how long individuals in the United States were unemployed during the 4-year period of January 2004 to December 2007.1,2 It updates and adds to the topics presented in the previous report from the SIPP on this subject, which was based on the 2001 SIPP panel and covered the period from January 2001 to December 2003 (Gottschalck, 2006). This new report contains comparisons of data on spell duration from the 2004 SIPP panel with data from the previous report. The tables in Appendix A display the detailed statistical data underlying the analysis.

The insights offered by the data in this report are framed within the particular economic and social conditions that marked the years 2004 through 2007.

During the first 3 years of this period, unemployment declined and employment increased. In 2007, however, employment growth slowed, and both the unemployment level and rate increased. The National Bureau of Economic Research identifi ed December 2007 as the start of a recession.3


1 The data in this report were collected from February 2004 to January 2008 in the 12 waves (interviews) of the 2004 panel of the Survey of Income and Program Participation. The population represented (the population universe) is the civilian noninstitutionalized population living in the United States.

2 The sample for the SIPP was reduced by about 50 percent beginning with the data for June to September 2006 (Wave 9 of the SIPP collection schedule). For a discussion of the effect of the reduction on the analysis of this report, see Appendix B.

3 See Morisi, 2005; Sok, 2006; Kline, 2007; and Borbely, 2008 and 2009.


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