NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Three-And-A-Half Million U.S. Employees Have Been Mislaid: Or, An Explanation of Unemployment, 1934-1941

Michael R. Darby

NBER Working Paper No. 88
Issued in May 1975

A major conceptual error in the standard BLS and Lebergott unemployment estimates for 1933-1943 is reported. Emergency workers (employees of federal contracyclical programs such as WPA) were counted as unemployed on a normal-jobs-to-be-created instead of job-seekers unemployment definition. For 1934-1941, the corrected unemployment levels are reduced by two to three-and-a half million people and the rates by 4 to 7 percentage points. The corrected data show strong movement toward the natural unemployment rate after 1933 and are very well explained by an anticipations-search model using annual full-time earnings.

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Document Object Identifier (DOI): 10.3386/w0088

Published: Darby, Michael R. "Three-And-A-Half Million U.S. Employees Have Been Mislaid: Or, An Explanation of Unemployment, 1934-1941." Journal of Political Economy, Vol. 84, No. 1, (February 1976), pp. 1-16. citation courtesy of

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