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
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
UI Tax Rate & Actuarial Analysis
UI-Covered Employment
Local Area Unemployment
Personal Income (BEA)
Gross Domestic Product (BEA)
Economic Forecasting
Current Employment Statistics
Occupational Employment Statistics
Job Creation/Destruction•Size Class Dynamics•Business Survival Rates
Geocoded Establishments
Occupational Employment Statistics
Occupational Safety and Health Statistics
Current Employment Statistics
National Compensation Survey
Industrial Price Program
Occupational Safety and Health Statistics
Programmatic Uses
Benchmarking(Employment Base)
General Economic Uses
Quarterly Census of Employment
& Wages Data (QCEW/ES-202)
Analytical Uses Sampling
Mass Layoff Statistics
State Revenue Projections
Jobs Openings & Labor Turnover Survey
Job Openings & Labor Turnover Survey
Quarterly Press Releases, Annual Employment and Wages
Local Economic Development Indicators
• Clusters Analysis• Shift Share• Industry Diversity Indexes• Location Quotients
Federal Funds Allocation$175 Billion
(HUD, USDA, HCFA/CHIP)
Minimum Wage Studies
Uses Of Quarterly Census of Employment and Wages Data (QCEW/ES-202)
Local Economic Impact Response Planning
Local Government Services Planning
Interagency Data Uses• Improve CPS After 2000 Census• LEHD• Industry Code Sharing
Local Transportation Planning
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
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
Job Reallocation
Job Reallocation Rates by Industry: September 2003
6.0
8.7
8.9
10.5
11.0
11.4
12.1
13.3
13.5
13.7
14.8
15.8
16.6
18.3
23.1
34.1
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0
Utilities
Manufacturing
Education and health services
Information
Financial activities
Wholesale trade
Transportation and w arehousing
Retail trade
Service-providing1
Total private
Goods-producing
Other services
Professional and business services
Leisure and hospitality
Construction
Natural resources and mining
Indu
stry
Job Reallocation Rate (Percent)
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
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
Chart 3. Manufacturing Sector Gross Job Gains and Losses, Seasonally Adjusted
Chart 4. Retail Trade Sector Gross Job Gains and Losses, Seasonally Adjusted
Business Survival Statistics
• Establishment level data, not enterprise
• Tracks a single cohort across 4 years
• Includes all sectors in the economy
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
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 supersectorsNatural Resources ConstructionTrade, Transportation, and Utilities ManufacturingInformation Education and Health ServicesProfessional and Business Services Financial ActivitiesLeisure and Hospitality Other Services
active births 1 year later 2 years later 3 years later 4 years later
212,182
81.2%
65.8%
54.3%
44.4%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Figure 1. Survival rates of new establishments from second quarter of 1998
Figure 2. Survival rates of new establishments from second quarter of 1998 by sector
43.9%
43.8%
55.4%
44.3%
49.2%
37.7%
44.7%
47.4%
42.6%
49.6%
53.3%
53.6%
63.7%
55.1%
58.6%
49.5%
54.7%
57.0%
53.6%
59.4%
64.8%
65.0%
72.8%
66.8%
69.6%
62.9%
66.8%
68.7%
65.7%
69.5%
80.7%
81.2%
85.6%
82.3%
84.1%
80.8%
82.6%
84.2%
80.7%
82.3%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
Other Services
Leisure & Hospitality
Education & Health Services
Professional & BusinessServices
Financial Activities
Information
Trade, Transportation, & Utilities
Manufacturing
Construction
Natural Resources & Mining
Ind
ust
ry
Survival Rate
1 year
2 years
3 years
4 years
Figure 3. Employment patterns of survivors by sector as percentage of original employment
79.8%
91.1%
113.2%
111.8%
105.9%
124.0%
101.0%
112.3%
94.7%
90.7%
71.2%
82.7%
117.4%
123.3%
102.7%
141.0%
98.8%
114.0%
85.6%
91.5%
64.6%
74.8%
114.8%
114.8%
97.2%
124.4%
91.4%
109.6%
76.2%
80.9%
57.3%
69.4%
113.7%
107.0%
92.4%
102.5%
85.0%
100.1%
70.3%
77.0%
0% 100%
Other Services
Leisure & Hospitality
Education & Health Services
Professional & BusinessServices
Financial Activities
Information
Trade, Transportation, & Utilities
Manufacturing
Construction
Natural Resources & Mining
Ind
ust
ry
Percentage of Original Employment
2002/2
2001/2
2000/2
1999/2
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
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
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
- Business Demography and BR- Critical output, visible output- Flows from BR strengths
- Comprehensive- Accurate
[email protected]/bdm/home.htm