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The Contribution Of Establishment Births And Deaths To Employment Growth
April 1998
Working Paper Number:
CES-98-05
The purpose of this paper is to examine how establishment births and deaths contribute to job creation, job destruction, and net employment growth at different frequencies of measurement. The longitudinal data are constructed from quarterly unemployment insurance microdata, and are essentially a census of establishments in all industries. Defining establishment births and deaths turns out to be an exercise in how to use cross-sectional administrative data for longitudinal research purposes. The analysis of job flows indicates that the frame is relatively small but certainly non-trivial, whereas births and deaths account for roughly half of all jobs created and destroyed on a triennial time frame. Net Employment Growth
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Survival Patterns Among Newcomers To Franchising
May 1997
Working Paper Number:
CES-97-05
This study analyzes survival patterns among franchisee firms adn establishments that began operations in 1986 and 1987. Differing methodologies and data bases are utilized to demonstrate that 1) franchises have higher survival rates than independents, and 2) franchises have lower survival rates than independent business formations. Analyses of corporate establishment data generate high franchisee survival rates relative to independents, while analyses of young firm data generate the opposite pattern. In either case, the franchise trait is one of several determinants of survival prospects. The larger-scale, more established firms consistently stay in operation more frequently than smaller-scale, younger firms. Analysis of all corporate establishment restaurant units opened in 1986 or 1987 that use paid employees in 1987 helps to reconcile the seeming inconsistencies reported above. Most of the young franchisee units were not owned by young firms: rather, their parents were multi-establishment franchisees, and most of them were mature firms. Among the true newcomers, franchise survival rates are low; among the entrenched multi-establishment franchisees, survival rates were high.
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Survival Patterns Among Newcomers to Franchising
January 1997
Working Paper Number:
CES-97-01
This study analyzes survival patterns among franchisee firms and establishments that began operations in 1986 and 1987. Differing methodologies and data bases are utilized to demonstrate that 1) franchises have higher survival rates than independents, and 2) franchises have lower survival rates than independent business formations. Analyses of corporate establishment data generate high franchisee survival rates relative to independents, while analyses of young firm data generate the opposite pattern. In either case, the franchise trait is one of several determinants of survival prospects. The larger-scale, more established firms consistently stay in operation more frequently than smaller-scale, younger firms. Analysis of all corporate establishment restaurant units opened in 1986 or 1987 that use paid employees in 1987 helps to reconcile the seeming inconsistencies reported above. Most of the young franchisee units were not owned by young firms: rather, their parents were multi-establishment franchisees, and most of them were mature firms. Among the true newcomers, franchise survival rates are low; among the entrenched multi-establishment franchisees, survival rates were high.
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Business Failure In The 1992 Establishment Universe Sources Of Population Heterogeneity
December 1996
Working Paper Number:
CES-96-13
This study shows that establishment dissolution declines with age and that age at dissolution differs for broad industry and geography groups, establishment affiliation status, and establishment size. The paper uses Bureau of the Census Standard Statistical Establishment List datasets, a census of establishments with employment for the United States for the year 1992. Hence, the findings constitute a comprehensive source of information on the relation between age and dissolution and place in context similar findings of studies restricted to specific industries and/or geographic areas.
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Interfirm Segregation and the Black/White Wage Gap
August 1996
Working Paper Number:
CES-96-06
This paper studies interfirm racial segregation in two newly developed firm-level databases. Within the representative MSA, we find that the interfirm distribution of black and white workers is close to what would be implied by the random assignment of workers to firms. However, we also find that black workers are systematically clustered in "black" employers where managers, owners, and customers are also black. These facts may be reconciled by the facts that a) there are not enough black employers to generate much segregation and that b) perhaps other difficult-to-identify forces serve to systematically integrate black and white workers. Finally, we find that the black/white wage gap is entirely a within-firm phenomenon, as blacks do not work in firms that pay low wages on average.
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Sex Segregation in U.S. Manufacturing
June 1996
Working Paper Number:
CES-96-04
This paper studies interplant sex segregation in the U.S. manufacturing industry. The study differs from previous work in that we have detailed information on the characteristics of both workers and firms, and because we measure segregation in a new and better way. We report three main findings. First, there is a substantial amount of interplant sex segregation in the U.S. manufacturing industry, although segregation is far from complete. Second, we find that female managers tend to work in the same plants as female supervisees, even once we control for other plant characteristics. And finally, we find that interplant segregation can account for a substantial fraction of the male/female wage gap in the manufacturing industry, particularly among blue-collar workers.
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The Worker-Establishment Characteristics Database
June 1995
Working Paper Number:
CES-95-10
A data set combining information on the characteristics of both workers and their employers has long been a grail for labor economists. The reason for this interest is that while a number of theoretical models in labor economics stress the importance of employer-employee matching in determining labor market outcomes, almost all empirical work relies on either worker surveys with little information about employers or establishment surveys with little information about workers. The Worker-Establishment Characteristic Database (WECD) represents just such an employer-employee-matched database. Containing 199,557 manufacturing workers matched to 16,144 manufacturing establishments, the WECD is the largest worker-firm matched data set available for the U.S. This paper describes how this data set was constructed and assesses the usefulness of these data for economic research. In addition, I discuss some of the issues that can be addressed using employer-employee-matched data and plans for creating future versions of the WECD.
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Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data
August 1994
Working Paper Number:
CES-94-10
In spite of the large and growing importance of the employer size-wage premium, previous attempts to account for this phenomenon using observable worker or employer characteristics have met with limited success. The primary reason for this lack of success has been the lack of suitable data. While most theoretical explanations for the size-wage premium are based on the matching of employer and employee characteristics, previous empirical work has relied on either worker surveys with little information about a worker's employer, or establishment surveys with little information about workers. In contrast, this study uses the newly created Worker-Establishment Characteristic Database, which contains linked employer-employee data for a large sample of manufacturing workers and establishments, to examine the employer size-wage premium. The main results are: 1) Examining the cross-plant distribution of the skill of workers shows that managers with larger observable measures of skill work in large plants and firms with production workers with larger observable measures of skill. 2) Results from reduced form wage regressions show that including measures of the amount or type of capital in a worker's plant eliminates the establishment size-wage premium. 3) These results are robust to efforts at correcting for possible bias in the parameter estimates due to sample selection. While these findings are consistent with neoclassical explanations for the size-wage premium that hypothesize that large employers employ more skilled workers, their primary importance is that they show that the employer size-wage premium can be accounted for with employer-employee matched data. As such, these data lend support to models which emphasize the role of employer-employee matching in accounting for both cross-sectional and dynamic aspects of the wage distribution.
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The Importance of Establishment Data in Economic Research
August 1993
Working Paper Number:
CES-93-10
The importance and usefulness of establishment microdata for economic research and policy analysis is outlined and contrasted with traditional products of statistical agencies -- aggregate cross-section tabulations. It is argued that statistical agencies must begin to seriously rethink the way they view establishment data products.
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Manufacturing Establishments Reclassified Into New Industries: The Effect Of Survey Design Rules
November 1992
Working Paper Number:
CES-92-14
Establishment reclassification occurs when an establishment classified in one industry in one year is reclassified into another industry in another year. Because of survey design rules at the Census Bureau these reclassifications occur systematically over time, and affect the industry-level time series of output and employment. The evidence shows that reclassified establishments occur most often in two distinct years over the life of a sample panel. Switches are not only numerous in these years, they also contribute significantly to measured industry change in industry output and employment. The problem is that reclassifications are not necessarily processed in the year that they occur. The survey rules restrict most change to certain years. The effect of these rules is evidenced by looking at the variance across industry growth rates which increases greatly in these two years. Whatever the reason for reclassifying an establishment, the way the switches are processed raises the possibility of measurement errors in the industry level statistics. Researchers and policymakers relying upon observations in annual changes in industry statistics should be aware of these systematic discontinuities, discrepancies and potential data distortions.
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