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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 Informal Jobholders
April 2007
Working Paper Number:
tp-2007-02
A significant number of employees within the United States can be considered "informal" or
"off-the-books" workers. These workers, who by definition do not appear in administrative wage
records, are distinct from the larger group of private jobholders who do appear in administrative
records. However, while socioeconomic and spatial information on these individuals is readily
available in standard datasets, such as the 2000 Decennial Census Long Form, it is not possible
to identify the informal workers by only using such data because of the lack of accurate, formal
wage records. This study takes advantage of firm-based data that originates in Unemployment
Insurance administrative wage records linked with the Census Bureau's household-based data in
order to examine informal jobholders by their demographic characteristics as well as their
economic, commuting, and spatial location outcomes. In addition this report evaluates whether
informal jobholders should be included explicitly in future labor-workforce analyses and
transportation modeling. The analyses in this report use the sample of workers who lived in Los
Angeles County, California.
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Do Employment Protections Reduce Productivity? Evidence from U.S. States
March 2007
Working Paper Number:
CES-07-04
Theory predicts that mandated employment protections may reduce productivity by distorting production choices. Firms facing (non-Coasean) worker dismissal costs will curtail hiring below efficient levels and retain unproductive workers, both of which should affect productivity. These theoretical predictions have rarely been tested. We use the adoption of wrongful discharge protections by U.S. state courts over the last three decades to evaluate the link between dismissal costs and productivity. Drawing on establishment-level data from the Annual Survey of Manufacturers and the Longitudinal Business Database, our estimates suggest that wrongful discharge protections reduce employment flows and firm entry rates. Moreover, analysis of plant-level data provides evidence of capital deepening and a decline in total factor productivity following the introduction of wrongful discharge protections. This last result is potentially quite important, suggesting that mandated employment protections reduce productive efficiency as theory would suggest. However, our analysis also presents some puzzles including, most significantly, evidence of strong employment growth following adoption of dismissal protections. In light of these puzzles, we read our findings as suggestive but tentative.
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Workplace Segregation in the United States: Race, Ethnicity, and Skill
January 2007
Working Paper Number:
CES-07-02
We study workplace segregation in the United States using a unique matched employer employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and . since skill is often correlated with race and ethnicity we assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity. We define segregation based on the extent to which workers are more or less likely to be in workplaces with members of the same group, and we measure segregation as the observed percentage relative to maximum segregation. Our results indicate that there is considerable segregation by education and language in the workplace. Among whites, for example, observed segregation by education is 17% (of the maximum), and for Hispanics, observed segregation by language ability is 29%. Racial (blackwhite) segregation in the workplace is of a similar magnitude to education segregation (14%), and ethnic (Hispanic-white) segregation is somewhat higher (20%). Only a tiny portion (3%) of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace (32%) can be attributed to differences in language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same language.
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Access to Financial Capital Among U.S. Businesses: The Case of African-American Firms
December 2006
Working Paper Number:
CES-06-33
The differences between African-American business ownership rates and white business ownership rates are striking. Estimates from the 2000 Census indicate that 11.8 percent of white workers are self-employed business owners, compared with only 4.8 percent of black workers. Furthermore, black-white differences in business ownership rates have remained roughly constant over most of the twentieth century (Fairlie and Meyer 2000). In addition to lower rates of business ownership, black-owned businesses are less successful on average than are white or Asian firms. In particular, black-owned businesses have lower sales, hire fewer employees and have smaller payrolls than white- or Asian-owned businesses, on average (U.S. Census Bureau 2001, U.S. Small Business Administration 2001). Black firms also have lower profits and higher closure rates than white firms (U.S. Census Bureau 1997, U.S. Small Business Administration 1999). For most outcomes, the disparities are extremely large. For example, estimates from the 2002 Survey of Business Owners (SBO) indicate that white firms have average sales of $437,870 compared with only $74,018 for black firms.
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Gross Job Flows for the U.S. Manufacturing Sector: Measurement from the Longitudinal Research Database
December 2006
Working Paper Number:
CES-06-30
Measures of job creation and destruction are now produced regularly by the U.S. statistical agencies. The Bureau of Labor Statistics releases via the Business Employment Dynamics (BED) on a quarterly basis measures of job creation and destruction for the U.S. nonfarm business sector and related disaggregation by industrial sector and size class. The U.S. Census Bureau has developed the Longitudinal Business Database (LBD) covering the nonfarm business sector that has been used to produce research analysis and special tabulations including tabulations of job creation and destruction. Both of these data programs build upon the measurement methods and data analysis of job creation and destruction measures from the Longitudinal Research Database (LRD) developed and published by Davis, Haltiwanger and Schuh (1996). In this paper, the LRD based estimates of job creation and destruction are updated and made available for consistent annual and quarterly series from 1972-1998. While the BED and LBD programs are more comprehensive in scope than the LRD, the extensive development of the LRD permits the construction of measures of job creation and destruction for a rich array of employer characteristics including industry, size, business age, ownership structure, location and wage structure. The updated series that are released with this working paper provide measures along each of these dimensions. The paper describes in detail the changes in the processing of the Annual Survey of Manufactures over the 1972-1998 period that are important to incorporate by users of the LRD at Census Research Data Centers as well as users of products from the LRD such as job creation and destruction.
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Residual Claims and Incentives in Restaurant Chains
July 2006
Working Paper Number:
CES-06-18
I examine the relationship between ownership and production activities using a new dataset of restaurant chains. Production in restaurant chains provides an opportunity to examine the effects of residual claims on incentives because production is decentralized and fairly uniform across restaurants in the same chain. Yet the allocation of residual claims varies between company-owned and franchised units, affecting the strength of incentives for restaurantlevel activities. The decision to own or franchise each restaurant reflects the value of either withholding or allocating residual claims for performing these activities. I find that more complex production activities are systematically correlated with company ownership. Onsite food production raises the likelihood of company ownership by 28% relative to offsite food production. Table service raises the likelihood of company ownership by 26% relative to counter service. The results are not consistent with straightforward effort-promoting effects of residual claims in simple principal agent models. They are consistent with the view that residual claims can generate unbalanced incentives across diverse tasks.
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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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