Online Appendix: Misclassification Errors and the Underestimation of the U.S. Unemployment Rate

This online appendix accompanies the paper “Misclassification Errors and the Underestimation of the U.S. Unemployment Rate” by Shuaizhang Feng and Yingyao Hu. Section 1 of the appendix lists summary statistics of the CPS sample used in the paper. Section 2 of the appendix provides a detailed proof of theorem 1 in the paper. Section 3 evaluates assumptions 1 and 2 in the paper through detailed monte carlo simulations. Section 4 tests assumptions 3 and 4 in the paper directly using CPS data. Additional empirical results including robustness checks are presented in sections 5, 6 and 7.