Expanding%20Business%20Employment%20Dynamics%20Industry%20and%20Survival

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• Expanding Business Employment Dynamics Industry
  and Survival

18th International Roundtable on Business
Survey Frames Beijing, China 10/22/04


Richard L. Clayton

David Talan

Amy Knaup

Akbar Sadeghi
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Data Source

• Only quarterly universe count in U.S.
  statistical system
• - quarterly employer reports (employment, wages,
  predecessors,etc)
• - augmented by BLS collections for
• A) industry detailed codes, addresses, etc.
• B) worksite breakouts for multi-site businesses
• In combination measure and allocate employment
  and wages Industry and detailed geography

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Uses Of Quarterly Census of Employment and Wages
Data (QCEW/ES-202)

• Local Economic Development Indicators
• Clusters Analysis
• Shift Share
• Industry Diversity Indexes
• Location Quotients

Current Employment Statistics
Gross Domestic Product (BEA)
Occupational Employment Statistics
Personal Income (BEA)
Minimum Wage Studies
State Revenue Projections
Occupational Safety and Health Statistics
Economic Forecasting
Jobs Openings Labor Turnover Survey
General Economic Uses
Benchmarking (Employment Base)
Quarterly Census of Employment Wages Data
(QCEW/ES-202)
Analytical Uses
Sampling

• Interagency Data Uses
• Improve CPS After 2000 Census
• LEHD
• Industry Code Sharing

Programmatic Uses
Local Government Services Planning
UI Tax Rate Actuarial Analysis
Local Economic Impact Response Planning
UI-Covered Employment
Local Area Unemployment
Local Transportation Planning
Mass Layoff Statistics
Federal Funds Allocation 175 Billion (HUD, USDA,
HCFA/CHIP)
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Business Employment Dynamics Methods

• Starts with cross-sectional QCEW data
• Establishments are linked longitudinally across
  time
• Linkages address mergers, acquisitions, and
• spin-offs, etc.
• 376 Million quarterly records and growing
• No new reporting burden
• Excludes self-employed, households, govt

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Gross job gains and losses since 1992

• Tremendous job churning not seen in net job data
• Gross job changes at expansions and contractions
  larger than at openings and closings
• Gross job gains and losses have business cycle
  properties
• Gross job gains remained low in 2003

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Job Reallocation
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Currently available data

• National data for total private and 15 major
  industry sectors.
• Quarterly data, September 1992 December 2003
• Data available with and without seasonal
  adjustment, approximately 8 months after close of
  the quarter.
• Data available for both employment and counts of
  establishments as levels and rates
• Establishment-based data

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Business Employment Dynamics Future published
data series

• Gross job gains and gross job losses by
• Industry - May 2004
• Size class - late 2004 early 2005
• States and counties 2005
• Researcher access

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Chart 3. Manufacturing Sector Gross Job Gains and
Losses, Seasonally Adjusted
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Chart 4. Retail Trade Sector Gross Job Gains and
Losses, Seasonally Adjusted
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Business Survival Statistics

• Establishment level data, not enterprise
• Tracks a single cohort across 4 years
• Includes all sectors in the economy

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Data

• Source Longitudinal Quarterly Census of
  Employment and Wages
• Unique Identifier to track establishment through
  ownership changes
• Births establishments which are new to the
  longitudinal QCEW in 1998/2

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QCEW Birth Cohort

• New establishments in 1998 2nd quarter
• 212,182 new establishments
• 0.16 were specifically involved in mergers,
  acquisitions, opening of new locations or closing
  of an existing location
• Ten supersectors
• Natural Resources Construction
• Trade, Transportation, and Utilities
  Manufacturing
• Information Education and Health Services
• Professional and Business Services Financial
  Activities
• Leisure and Hospitality Other Services

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Average employment of survivors, by sector and year from birth Average employment of survivors, by sector and year from birth Average employment of survivors, by sector and year from birth Average employment of survivors, by sector and year from birth Average employment of survivors, by sector and year from birth
NAICS Supersector 1st year (1999) 2nd year (2000) 3rd year (2001) 4th year (2002)
Natural Resources and Mining 7.5 9.0 9.3 10.6
Construction 4.2 4.7 5.1 5.9
Manufacturing 8.3 10.3 12.0 13.2
Trade, Transportation, and Utilities 4.1 4.9 5.6 6.3
Information 7.2 10.5 11.8 12.8
Financial Activities 3.8 4.5 5.0 5.7
Professional and Business Services 4.6 6.2 7.0 8.1
Education and Health Services 6.5 7.9 8.9 10.1
Leisure and Hospitality 1.2 11.5 12.7 14.4
Other Services 1.7 1.9 2.1 2.3
National 4.6 5.6 6.3 7.2
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Next Steps Survival

• Continue to track units through the U.S.
  recession and recovery
• Compare to Eurostat/OECD data, adjust for scope
  or other differences

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Conclusions

• Survival rates are fairly stable across
  industries
• Need more detailed industries
• Surviving establishments tend to grow over their
  lifetime, evident in 1st year
• Business Demographics
• Snapshots and longitudinal
• Many and growing insights

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• Business Demography and BR
• Critical output, visible output
• Flows from BR strengths
• Comprehensive
• Accurate
• clayton.rick_at_bls.gov
• www.bls.gov/bdm/home.htm