CREAT: Census Research Exploration and Analysis Tool

Just Passing Through: Characterizing U.S. Pass-Through Business Owners

January 2017

Working Paper Number:

CES-17-69

Abstract

We investigate the use of administrative data on the owners of partnerships and S-corporations to develop new statistics that characterize business owners. Income from these types of entities is "passed through" to owners to be taxed on the owners' tax returns. The information returns associated with such pass-through entities (Form K1 records) make it possible to link individual owners to the businesses they own. These linkages can be leveraged to associate measures of the demographic and human capital characteristics of business owners with the characteristics of the businesses they own. This paper describes measurement issues associated with administrative records on these pass-through entities and their integration with other Census data products. In addition, we document a number of interesting trends in business ownership among pass-through entities. We show a substantial decline in both entry and exit with less churn among both owners and owned businesses. We also show that the owners of pass-through entities are older, more likely to be male, and more likely to be white compared to the working population.

Document Tags and Keywords

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:
work census, enterprise, census data, agency, corporation, employee, organizational, owner, ownership, entrepreneur, business owners, characteristics businesses, owned businesses, state, incorporated, revenue, economic census, business data, census business, irs, census use, corp

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Internal Revenue Service, Bureau of Labor Statistics, Social Security Administration, County Business Patterns, Current Population Survey, Longitudinal Business Database, Decennial Census, Employer Identification Numbers, Social Security, Economic Census, North American Industry Classification System, Social Security Number, Business Register, Protected Identification Key, Survey of Business Owners, Business Dynamics Statistics, Census Numident, Federal Tax Information

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