1. Expanding Business Employment Dynamics Industry and Survival 18 th International Roundtable on Business Survey Frames Beijing, China 10/22/04 Richard L. Clayton David Talan Amy Knaup Akbar Sadeghi

2. 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

3. 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

4. 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

5. 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

9. Job Reallocation

12. 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

13. 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

15. Chart 3. Manufacturing Sector Gross Job Gains and Losses, Seasonally Adjusted

16. Chart 4. Retail Trade Sector Gross Job Gains and Losses, Seasonally Adjusted

18. Business Survival Statistics Establishment level data, not enterprise Tracks a single cohort across 4 years Includes all sectors in the economy

19. 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

20. QCEW: Birth Cohort New establishments in 1998 2 nd 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 ResourcesConstruction Trade, Transportation, and Utilities Manufacturing InformationEducation and Health Services Professional and Business ServicesFinancial Activities Leisure and HospitalityOther Services

24. Average employment of survivors, by sector and year from birth NAICS Supersector1 st year (1999) 2 nd year (2000) 3 rd year (2001) 4 th year (2002) Natural Resources and Mining7.59.09.310.6 Construction4.24.75.15.9 Manufacturing8.310.312.013.2 Trade, Transportation, and Utilities4.14.95.66.3 Information7.210.511.812.8 Financial Activities3.84.55.05.7 Professional and Business Services4.66.27.08.1 Education and Health Services6.57.98.910.1 Leisure and Hospitality1.211.512.714.4 Other Services1.71.92.12.3 National4.65.66.37.2

25. 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

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

27. -Business Demography and BR -Critical output, visible output -Flows from BR strengths -Comprehensive -Accurate clayton.rick@bls.gov www.bls.gov/bdm/home.htm