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Social, Economic, Spatial, and Commuting Patterns of Self-Employed Jobholders
April 2007
Working Paper Number:
tp-2007-03
A significant number of employees within the United States identify themselves as selfemployed,
and they are distinct from the larger group identified as private jobholders. While
socioeconomic and spatial information on these individuals is readily available in standard
datasets, such as the 2000 Decennial Census Long Form, it is possible to gain further information
on their wage earnings by using data from administrative wage records. This study takes
advantage of firm-based data from Unemployment Insurance administrative wage records linked
with the Census Bureau's household-based data in order to examine self-employed jobholders -
both as a whole and as subgroups defined according to their earned wage status - by their
demographic characteristics as well as their economic, commuting, and spatial location
outcomes. Additionally, this report evaluates whether self-employed jobholders and the defined
subgroups should be included explicitly in future labor-workforce analyses and transportation
modeling. The analyses in this report use the sample of self-employed workers who lived in Los
Angeles County, California.
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Social, Economic, Spatial, and Commuting Patterns of Dual Jobholders
April 2007
Working Paper Number:
tp-2007-01
Individuals who hold multiple jobs have complex working lives and complex commuting
patterns. Economic and spatial information on these individuals is not readily available in
standard datasets, such as the 2000 Decennial Census Long Form, because the survey questions
were not designed to collect details on multiple jobs. This study takes advantage of firm-based
data from the Unemployment Insurance administrative wage records, linked with the Census
Bureau's household-based data, to examine multiple jobholders - and specifically a sentinel
group of dual jobholders. The study uses a sample from Los Angeles County, California and
examines the dual jobholders by their demographic characteristics as well as their economic,
commuting, and spatial location outcomes. In addition this report evaluates whether multiple
jobholders should be included explicitly in future labor-workforce analyses and transportation
modeling.
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Using linked employer-employee data to investigate the speed of adjustments in downsizing firms
May 2006
Working Paper Number:
tp-2006-03
When firms are faced with a demand shock, adjustment can take many forms. Firms can adjust
physical capital, human capital, or both. The speed of adjustment may differ as well: costs of
adjustment, the type of shock, the legal and economic enviroment all matter. In this paper, we
focus on firms that downsized between 1992 and 1997, but ultimately survive, and investigate how
the human capital distribution within a firm influences the speed of adjustment, ceteris paribus. In
other words, when do firms use mass layoffs instead of attrition to adjust the level of employment.
We combine worker-level wage records and measures of human capital with firm-level characteristics
of the production function, and use levels and changes in these variables to characterize
the choice of adjustment method and speed. Firms are described/compared up to 9 years prior to
death. We also consider how workers fare after leaving downsizing firms, and analyze if observed
differences in post-separation outcomes of workers provide clues to the choice of adjustment speed.
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Confidentiality Protection in the Census Bureau Quarterly Workforce Indicators
February 2006
Working Paper Number:
tp-2006-02
The QuarterlyWorkforce Indicators are new estimates developed by the Census Bureau's Longitudinal
Employer-Household Dynamics Program as a part of its Local Employment Dynamics
partnership with 37 state Labor Market Information offices. These data provide detailed quarterly
statistics on employment, accessions, layoffs, hires, separations, full-quarter employment
(and related flows), job creations, job destructions, and earnings (for flow and stock categories of
workers). The data are released for NAICS industries (and 4-digit SICs) at the county, workforce
investment board, and metropolitan area levels of geography. The confidential microdata - unemployment
insurance wage records, ES-202 establishment employment, and Title 13 demographic
and economic information - are protected using a permanent multiplicative noise distortion factor.
This factor distorts all input sums, counts, differences and ratios. The released statistics are analytically
valid - measures are unbiased and time series properties are preserved. The confidentiality
protection is manifested in the release of some statistics that are flagged as "significantly distorted
to preserve confidentiality." These statistics differ from the undistorted statistics by a significant
proportion. Even for the significantly distorted statistics, the data remain analytically valid for
time series properties. The released data can be aggregated; however, published aggregates are
less distorted than custom postrelease aggregates. In addition to the multiplicative noise distortion,
confidentiality protection is provided by the estimation process for the QWIs, which multiply imputes
all missing data (including missing establishment, given UI account, in the UI wage record
data) and dynamically re-weights the establishment data to provide state-level comparability with
the BLS's Quarterly Census of Employment and Wages.
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The LEHD Infrastructure Files and the Creation of the Quarterly Workforce Indicators
January 2006
Working Paper Number:
tp-2006-01
The Longitudinal Employer-Household Dynamics (LEHD) Program at the U.S. Census Bureau,
with the support of several national research agencies, has built a set of infrastructure files
using administrative data provided by state agencies, enhanced with information from other administrative
data sources, demographic and economic (business) surveys and censuses. The LEHD
Infrastructure Files provide a detailed and comprehensive picture of workers, employers, and their
interaction in the U.S. economy. Beginning in 2003 and building on this infrastructure, the Census
Bureau has published the Quarterly Workforce Indicators (QWI), a new collection of data series
that offers unprecedented detail on the local dynamics of labor markets. Despite the fine detail,
confidentiality is maintained due to the application of state-of-the-art confidentiality protection
methods. This article describes how the input files are compiled and combined to create the infrastructure
files. We describe the multiple imputation methods used to impute in missing data and
the statistical matching techniques used to combine and edit data when a direct identifier match
requires improvement. Both of these innovations are crucial to the success of the final product. Finally,
we pay special attention to the details of the confidentiality protection system used to protect
the identity and micro data values of the underlying entities used to form the published estimates.
We provide a brief description of public-use and restricted-access data files with pointers to further
documentation for researchers interested in using these data.
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The Impact of Minimum Quality Standards on Firm Entry, Exit and Product Quality: The Case of the Child Care Market
December 2005
Working Paper Number:
CES-05-28
We examine the impact of minimum quality standards on the supply side of the child care market, using a unique panel data set merged from the Census of Services Industries, state regulation data, and administrative accreditation records from the National Association of Education for Young Children. We control for state-specific and time-specific fixed effects in order to mitigate the biases associated with policy endogeneity. We find that the effects of quality standards specifying the labor intensiveness of child care services are strikingly different from those specifying staff qualifications. Higher staff-child ratio requirements deter entry and reduce the number of operating child care establishments. This entry barrier appears to select establishments with better quality into the market and alleviates competition among existing establishments: existing establishments are more likely to receive accreditation and higher profits, and are less likely to exit. By contrast, higher staff-education requirements do not have entry-deterrence effects. They do have the unintended effects of discouraging accreditation, reducing owners' profits, and driving firms out of businesses.
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Using Census Business Data to Augment the MEPS-IC
December 2005
Working Paper Number:
CES-05-26
This paper has two aims: first to describe methods, issues, and outcomes involved in matching data from the Insurance Component of the Medical Expenditure Panel Survey (MEPSIC) to other business microdata collected by the U.S. Census Bureau, and second to present some simple results that illustrate the usefulness of such combined data. We present the results of linking the MEPS-IC with data from the 1997 Economic Censuses (EC), but also discuss other possible sources of business data. An issue in any linkage is whether the linked sample remains representative and large enough to be useful. The EC data are attractive because, given the survey's broad coverage and large sample, most of the MEPS-IC sample can be matched to it. We use the combined EC/MEPS-IC data to construct productivity measures that are useful auxiliary data in examining employers' health insurance offering decisions.
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Wage Dispersion, Compensation Policy and the Role of Firms
November 2005
Working Paper Number:
tp-2005-04
Empirical work in economics stresses the importance of unobserved firm- and person-level characteristics
in the determination of wages, finding that these unobserved components account for the overwhelming
majority of variation in wages. However, little is known about the mechanisms sustaining these wage di'er-
entials. This paper attempts to demystify the firm-side of the puzzle by developing a statistical model that
enriches the role that firms play in wage determination, allowing firms to influence both average wages as
well as the returns to observable worker characteristics.
I exploit the hierarchical nature of a unique employer-employee linked dataset for the United States,
estimating a multilevel statistical model of earnings that accounts for firm-specific deviations in average
wages as well as the returns to components of human capital - race, gender, education, and experience -
while also controlling for person-level heterogeneity in earnings. These idiosyncratic prices reflect one aspect
of firm compensation policy; another, and more novel aspect, is the unstructured characterization of the
covariance of these prices across firms.
I estimate the model's variance parameters using Restricted (or Residual) Maximum Likelihood tech-
niques. Results suggest that there is significant variation in the returns to worker characteristics across
firms. First, estimates of the parameters of the covariance matrix of firm-specific returns are statistically
significant. Firms that tend to pay higher average wages also tend to pay higher than average returns to
worker characteristics; firms that tend to reward highly the human capital of men also highly reward the
human capital of women. For instance, the correlation between the firm-specific returns to education for
men and women is 0.57. Second, the firm-specific returns account for roughly 9% of the variation in wages
- approximately 50% of the variation in wages explained by firm-specific intercepts alone. The inclusion of
firm-specific returns ties variation in wages, otherwise attributable to firm-specific intercepts, to observable
components of human capital.
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Employer-Provided Benefit Plans, Workforce Composition and Firm Outcomes
January 2005
Working Paper Number:
tp-2005-01
What do firms gain by offering benefits? Economists have proposed two payoffs: (i) benefits
may be a more cost-effective form of compensation than wages for employees facing high
marginal tax rates, and (ii) benefits may attract a more stable, skilled workforce. Both should
improve firm outcomes, but we have little evidence on this matter. This paper exploits a rich
new dataset to examine how firm productivity and survival are related to benefit offering, and
finds that benefit-offering firms have higher productivity and higher survival rates. Differences
in firm and workforce characteristics explain some but not all of the differences in outcomes.
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Production Function and Wage Equation Estimation with Heterogenous Labor: Evidence from a New Matched Employer-Employee Dataset
April 2004
Working Paper Number:
CES-04-05
In this paper, we first describe the 1990 DEED, the most recently constructed matched employeremployee data set for the United States that contains detailed demographic information on workers (most notably, information on education). We then use the data from manufacturing establishments in the 1990 DEED to update and expand on previous findings, using a more limited data set, regarding the measurement of the labor input and theories of wage determination (Hellerstein, et al., 1999). We find that the productivity of women is less than that of men, but not by enough to fully explain the gap in wages, a result that is consistent with wage discrimination against women. In contrast, we find no evidence of wage discrimination against blacks. We estimate that both the wage and productivity profiles are rising but concave to the origin (consistent with profiles quadratic in age), but the estimated relative wage profile is steeper than the relative productivity profile, consistent with models of deferred wages. We find a productivity premium for marriage equal to that of the wage premium, and a productivity premium for education that somewhat exceeds the wage premium. Exploring the sensitivity of these results, we also find that different specifications of production functions do not have any qualitative effects on the these results. Finally, the results indicate that the returns to productive inputs (capital, materials, labor quality) as well as the residual variance are virtually unaffected by the choice of the construction of the labor quality input.
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