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FIRM AGE AND SIZE IN THE LONGITUDINAL EMPLOYER-HOUSEHOLD DYNAMICS DATA
March 2014
Working Paper Number:
CES-14-16
The Census Bureau's Quarterly Workforce Dynamics (QWI) and OnTheMap now provide detailed workforce statistics by employer age and size. These data allow a first look at the demographics of workers at small and young businesses as well as detailed analysis of how hiring, turnover, job creation/destruction vary throughout a firm's lifespan. Both the QWI and OnTheMap are tabulated from the Longitudinal Employer-Household Dynamics (LEHD) linked employer-employee data. Firm age and size information was added to the LEHD data through integration of Business Dynamics Statistics (BDS) microdata into the LEHD jobs frame. This paper describes how these two new firm characteristics were added to the microdata and how they are tabulated in QWI and OnTheMap
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THE TRADABILITY OF SERVICES: GEOGRAPHIC CONCENTRATION AND TRADE COSTS
March 2014
Working Paper Number:
CES-14-03
We develop a methodology for estimating the 'tradability' of goods and services using data on U.S. establishments. Our results show that the average service industry is less tradable than the average manufacturing industry. However, there is considerable within-sector variation in estimated tradability and many service industries are as tradable as manufacturing. Tradable service industries account for a significant share of economic activity and workers employed in those industries have relatively high average wages. Counterfactual analysis indicates that the potential welfare gains from policy liberalization in service trade are of the same order of magnitude as liberalization in the manufacturing sector.
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A FIRST STEP TOWARDS A GERMAN SYNLBD: CONSTRUCTING A GERMAN LONGITUDINAL BUSINESS DATABASE
February 2014
Working Paper Number:
CES-14-13
One major criticism against the use of synthetic data has been that the efforts necessary to generate useful synthetic data are so in- tense that many statistical agencies cannot afford them. We argue many lessons in this evolving field have been learned in the early years of synthetic data generation, and can be used in the development of new synthetic data products, considerably reducing the required in- vestments. The final goal of the project described in this paper will be to evaluate whether synthetic data algorithms developed in the U.S. to generate a synthetic version of the Longitudinal Business Database (LBD) can easily be transferred to generate a similar data product for other countries. We construct a German data product with infor- mation comparable to the LBD - the German Longitudinal Business Database (GLBD) - that is generated from different administrative sources at the Institute for Employment Research, Germany. In a fu- ture step, the algorithms developed for the synthesis of the LBD will be applied to the GLBD. Extensive evaluations will illustrate whether the algorithms provide useful synthetic data without further adjustment. The ultimate goal of the project is to provide access to multiple synthetic datasets similar to the SynLBD at Cornell to enable comparative studies between countries. The Synthetic GLBD is a first step towards that goal.
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AN 'ALGORITHMIC LINKS WITH PROBABILITIES' CONCORDANCE FOR TRADEMARKS: FOR DISAGGREGATED ANALYSIS OF TRADEMARK & ECONOMIC DATA
September 2013
Working Paper Number:
CES-13-49
Trademarks (TMs) shape the competitive landscape of markets for goods and services in all countries through branding and conveying information and quality inherent in products. Yet, researchers are largely unable to conduct rigorous empirical analysis of TMs in the modern economy because TM data and economic activity data are organized differently and cannot be analyzed jointly at the industry or sectoral level. We propose an 'Algorithmic Links with Probabilities' (ALP) approach to match TM data to economic data and enable these data to speak to each other. Specifically, we construct a NICE Class Level concordance that maps TM data into trade and industry categories forward and backward. This concordance allows researchers to analyze differences in TM usage across both economic and TM sectors. In this paper, we apply this ALP concordance for TMs to characterize patterns in TM applications across countries, industries, income levels and more. We also use the concordance to investigate some of the key determinants of international technology transfer by comparing bilateral TM applications and bilateral patent applications. We conclude with a discussion of possible extensions of this work, including deeper indicator-level concordances and further analyses that are possible once TM data are linked with economic activity data.
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A COMPARISON OF PERSON-REPORTED INDUSTRY TO EMPLOYER-REPORTED INDUSTRY
IN SURVEY AND ADMINISTRATIVE DATA
September 2013
Working Paper Number:
CES-13-47
The Census Bureau collects industry information through surveys and administrative data and creates associated public-use statistics. In this paper, we compare person-reported industry in the American Community Survey (ACS) to employer-reported industry from the Quarterly Census of Employment and Wages (QCEW) that is part of the Census Bureau's Longitudinal Employer-Household Dynamics (LEHD) program. This research provides necessary information on the use of administrative data as a supplement to survey data industry information, and the findings will be useful for anyone using industry information from either source. Our project is part of a larger effort to compare information on jobs from household survey data to employer-reported information. This research is the first to compare ACS job data to firm-based administrative data. We find an overall industry sector match rate of 75 percent, and a 61 percent match rate at the 4-digit Census Industry Code (CIC) level. Industry match rates vary by sector and by whether industry sector is classified using ACS or LEHD industry information. The educational services and health care and social assistance sectors have among the highest match rates. The management of companies and enterprises sector has the lowest match rate, using either ACS-reported or LEHD-reported sector. For individuals with imputed industry data, the industry sector match rate is only 14 percent. Our findings suggest that the industry distribution and the sample in a particular industry sector will differ depending on whether ACS or LEHD data are used.
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Industrial Concentration of Ethnic Minority- and Women-Owned Businesses in the United States
June 2013
Working Paper Number:
CES-13-34
The number of ethnic minority and women-owned businesses has increased rapidly during the past few decades. However, the characteristics of these businesses and their owners differ by race, ethnicity, and gender. Using a confidential national survey of ethnic minority and women-owned businesses in the United States, this study examines ethnic minority- and women-owned businesses segmented by industrial sectors. Consistent with gender occupational segregation, male- and female- owned businesses have distinctive sectoral concentration patterns, with ethnic minority women- owned businesses highly concentrated in a limited number of industrial sectors. However, the relationship between business sectoral concentration and business performance is not uniform across ethnic and gender groups. Concentration in specific industrial sectors does not necessarily mean poor performance when measured by sales, size of employment or payrolls. However, for women-owned businesses, those sectors obviously pay less and have marginal profits, especially if considering the size of the firms.
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How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size
June 2013
Working Paper Number:
CES-13-30
There remains considerable debate in the theoretical and empirical literature about the differences in the cyclical dynamics of firms by firm size. This paper contributes to the debate in two ways. First, the key distinction between firm size and firm age is introduced. The evidence presented in this paper shows that young businesses (that are typically small) exhibit very different cyclical dynamics than small/older businesses. The second contribution is to present evidence and explore explanations for the finding that young/small businesses were hit especially hard in the Great Recession. The collapse in housing prices accounts for a significant part of the large decline of young/small businesses in the Great Recession.
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EVIDENCE OF AN 'ENERGY-MANAGEMENT GAP' IN U.S. MANUFACTURING:
SPILLOVERS FROM FIRM MANAGEMENT PRACTICES TO ENERGY EFFICIENCY
April 2013
Working Paper Number:
CES-13-25
In this paper we merge a well-cited survey of firm management practices into confidential U.S. Census microdata to examine whether generic, i.e. non-energy specific, firm management practices, 'spillover' to enhance energy efficiency in the United States. We find the relationship in U.S. plants to be more nuanced than past research on UK plants has suggested. Most management techniques have beneficial spillovers to energy efficiency, but an emphasis on generic targets, conditional on other management practices, results in spillovers that increase energy intensity. Our specification controls for industry specific effects at a detailed 6-digit NAICS level and shows that this result is stronger for firms in energy intensive industries. We interpret the empirical result that generic management practices do not necessarily spillover to improved energy performance as evidence of an 'energy management gap.'
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Are We Undercounting Reallocation's Contribution to Growth?
January 2013
Working Paper Number:
CES-13-55R
There has been a strong surge in aggregate productivity growth in India since 1990, following
significant economic reforms. Three recent studies have used two distinct methodologies to decompose the sources of growth, and all conclude that it has been driven by within-plant increases in technical efficiency and not between-plant reallocation of inputs. Given the nature of the reforms, where many barriers to input reallocation were removed, this finding has surprised researchers and been dubbed 'India's Mysterious Manufacturing Miracle.' In this paper, we show that the methodologies used may artificially understate the extent of reallocation. One approach, using growth in value added, counts all reallocation growth arising from the movement of intermediate inputs as technical efficiency growth. The second approach, using the Olley-Pakes decomposition, uses estimates of plant-level total factor productivity (TFP) as a proxy for the marginal product of inputs. However, in equilibrium, TFP and the marginal product of inputs are unrelated. Using microdata on manufacturing from five countries ' India, the U.S., Chile, Colombia, and Slovenia ' we show that both approaches significantly understate the true
role of reallocation in economic growth. In particular, reallocation of materials is responsible for over half of aggregate Indian manufacturing productivity growth since 2000, substantially larger than either the contribution of primary inputs or the change in the covariance of productivity and size.
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Technology and Production Fragmentation: Domestic versus Foreign Sourcing
January 2013
Working Paper Number:
CES-13-35R
This paper provides direct empirical evidence on the relationship between technology and firms' global sourcing strategies. Using new data on U.S. firms' decisions to contract for manufacturing services from domestic or foreign suppliers, I show that a firm's adoption of communication technology between 2002 to 2007 is associated with a 3.1 point increase in its probability of fragmentation. The effect of firm technology also differs significantly across industries; in 2007, it is 20 percent higher, relative to the mean, in industries with production specifications that are easier to codify in an electronic format. These patterns suggest that technology lowers coordination costs, though its effect is disproportionately higher for domestic rather than foreign sourcing. The larger impact on domestic fragmentation highlights its importance as an alternative to offshoring, and can be explained by complementarities between technology and worker skill. High technology firms and industries are more likely to source from high human capital countries, and the differential impact of technology across industries is strongly increasing in country human capital.
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