Papers Containing Tag(s): 'Bureau of Economic Analysis'
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Viewing papers 41 through 50 of 227
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Working PaperBusiness Applications as a Leading Economic Indicator?
May 2021
Working Paper Number:
CES-21-09R
How are applications to start new businesses related to aggregate economic activity? This paper explores the properties of three monthly business application series from the U.S. Census Bureau's Business Formation Statistics as economic indicators: all business applications, business applications that are relatively likely to turn into new employer businesses ('likely employers'), and the residual series -- business applications that have a relatively low rate of becoming employers ('likely non-employers'). Growth in applications for likely employers significantly leads total nonfarm employment growth and has a strong positive correlation with it. Furthermore, growth in applications for likely employers leads growth in most of the monthly Principal Federal Economic Indicators (PFEIs). Motivated by our findings, we estimate a dynamic factor model (DFM) to forecast nonfarm employment growth over a 12-month period using the PFEIs and the likely employers series. The latter improves the model's forecast, especially in the years following the turning points of the Great Recession and the COVID-19 pandemic. Overall, applications for likely employers are a strong leading indicator of monthly PFEIs and aggregate economic activity, whereas applications for likely non-employers provide early information about changes in increasingly prevalent self-employment activity in the U.S. economy.View Full Paper PDF
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Working PaperMeasuring the Impact of COVID-19 on Businesses and People: Lessons from the Census Bureau's Experience
January 2021
Working Paper Number:
CES-21-02
We provide an overview of Census Bureau activities to enhance the consistency, timeliness, and relevance of our data products in response to the COVID-19 pandemic. We highlight new data products designed to provide timely and granular information on the pandemic's impact: the Small Business Pulse Survey, weekly Business Formation Statistics, the Household Pulse Survey, and Community Resilience Estimates. We describe pandemic-related content introduced to existing surveys such as the Annual Business Survey and the Current Population Survey. We discuss adaptations to ensure the continuity and consistency of existing data products such as principal economic indicators and the American Community Survey.View Full Paper PDF
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Working PaperBusiness-Level Expectations and Uncertainty
December 2020
Working Paper Number:
CES-20-41
The Census Bureau's 2015 Management and Organizational Practices Survey (MOPS) utilized innovative methodology to collect five-point forecast distributions over own future shipments, employment, and capital and materials expenditures for 35,000 U.S. manufacturing plants. First and second moments of these plant-level forecast distributions covary strongly with first and second moments, respectively, of historical outcomes. The first moment of the distribution provides a measure of business' expectations for future outcomes, while the second moment provides a measure of business' subjective uncertainty over those outcomes. This subjective uncertainty measure correlates positively with financial risk measures. Drawing on the Annual Survey of Manufactures and the Census of Manufactures for the corresponding realizations, we find that subjective expectations are highly predictive of actual outcomes and, in fact, more predictive than statistical models fit to historical data. When respondents express greater subjective uncertainty about future outcomes at their plants, their forecasts are less accurate. However, managers supply overly precise forecast distributions in that implied confidence intervals for sales growth rates are much narrower than the distribution of actual outcomes. Finally, we develop evidence that greater use of predictive computing and structured management practices at the plant and a more decentralized decision-making process (across plants in the same firm) are associated with better forecast accuracy.View Full Paper PDF
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Working PaperIdentifying U.S. Merchandise Traders: Integrating Customs Transactions with Business Administrative Data
September 2020
Working Paper Number:
CES-20-28
This paper describes the construction of the Longitudinal Firm Trade Transactions Database (LFTTD) enabling the identification of merchandise traders - exporters and importers - in the U.S. Census Bureau's Business Register (BR). The LFTTD links merchandise export and import transactions from customs declaration forms to the BR beginning in 1992 through the present. We employ a combination of deterministic and probabilistic matching algorithms to assign a unique firm identifier in the BR to a merchandise export or import transaction record. On average, we match 89 percent of export and import values to a firm identifier. In 1992, we match 79 (88) percent of export (import) value; in 2017, we match 92 (96) percent of export (import) value. Trade transactions in year t are matched to years between 1976 and t+1 of the BR. On average, 94 percent of the trade value matches to a firm in year t of the BR. The LFTTD provides the most comprehensive identification of and the foundation for the analysis of goods trading firms in the U.S. economy.View Full Paper PDF
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Working PaperHow Does State-Level Carbon Pricing in the United States Affect Industrial Competitiveness?
June 2020
Working Paper Number:
CES-20-21
Pricing carbon emissions from an individual jurisdiction may harm the competitiveness of local firms, causing the leakage of emissions and economic activity to other regions. Past research concentrates on national carbon prices, but the impacts of subnational carbon prices could be more severe due to the openness of regional economies. We specify a flexible model to capture competition between a plant in a state with electric sector carbon pricing and plants in other states or countries without such pricing. Treating energy prices as a proxy for carbon prices, we estimate model parameters using confidential plant-level Census data, 1982'2011. We simulate the effects on manufacturing output and employment of carbon prices covering the Regional Greenhouse Gas Initiative (RGGI) in the Northeast and Mid-Atlantic regions. A carbon price of $10 per metric ton on electricity output reduces employment in the regulated region by 2.7 percent, and raises employment in nearby states by 0.8 percent, although these estimates do not account for revenue recycling in the RGGI region that could mitigate these employment changes. The effects on output are broadly similar. National employment falls just 0.1 percent, suggesting that domestic plants in other states as opposed to foreign facilities are the principal winners from state or regional carbon pricing.View Full Paper PDF
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Working PaperDoes Goliath Help David? Anchor Firms and Startup Clusters
May 2020
Working Paper Number:
CES-20-17
This paper investigates the effects of a large firm's geographical expansion (anchor firm) on local worker transitions into young firms through wage effects in industries economically proximate to the anchor firm. Using hand-collected data matched to administrative Census microdata, I exploit anchor firms' site selection processes to employ a difference-in-differences approach to compare workers in winning counties to those in counterfactual counties. The arrival of an anchor firm induces worker reallocation towards young firms in industries linked through input-output channels by a magnitude of 120 new businesses that account for approximately 2,300 jobs. Consistent with the literature in personnel and organizational economics, incumbent firms experiencing the fastest wage growth due to these shocks shed mid-layer employees who select into young firms within the county and in their own industry of experience. These effects are strongest in the most specialized and knowledge-intensive industries. Attracting an anchor firm to a county appears to have limited spillover effects in overall employment that are mainly driven by reorganization of incumbent firms in the anchor's input-output industries that face rising labor costs.View Full Paper PDF
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Working PaperMeasuring the Effect of COVID-19 on U.S. Small Businesses: The Small Business Pulse Survey
May 2020
Working Paper Number:
CES-20-16
In response to the novel coronavirus (COVID-19) pandemic, the Census Bureau developed and fielded an entirely new survey intended to measure the effect on small businesses. The Small Business Pulse Survey (SBPS) will run weekly from April 26 to June 27, 2020. Results from the SBPS will be published weekly through a visualization tool with downloadable data. We describe the motivation for SBPS, summarize how the content for the survey was developed, and discuss some of the initial results from the survey. We also describe future plans for the SBPS collections and for our research using the SBPS data. Estimates from the first week of the SBPS indicate large to moderate negative effects of COVID-19 on small businesses, and yet the majority expect to return to usual level of operations within the next six months. Reflecting the Census Bureau's commitment to scientific inquiry and transparency, the micro data from the SBPS will be available to qualified researchers on approved projects in the Federal Statistical Research Data Center network.View Full Paper PDF
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Working PaperAre Customs Records Consistent Across Countries? Evidence from the U.S. and Colombia
March 2020
Working Paper Number:
CES-20-11
In many countries, official customs records include identifying information on the exporting and importing firms involved in each shipment. This information allows researchers to study international business networks, offshoring patterns, and the micro-foundations of aggregate trade flows. It also provides the government with a basis for tariff assessments at the border. However, there are no mechanisms in place to ensure that the shipment-level information recorded by the exporting country is consistent with the shipment-level information recorded by the importing country. And to the extent that there are discrepancies, it is not clear how prevalent they are or what form they take. In this paper we explore these issues, both to enhance our understanding of the limitations of customs records, and to inform future discussions of possible revisions in the way they are collected. Specifically, we match U.S.-bound export shipments that appear in Colombian Customs records (DIAN) with their counterparts in the US Customs records (LFTTD): U.S. import shipments from Colombia. Several patterns emerge. First, differences in the coverage of the two countries customs records lead to significant discrepancies in the official bilateral trade flow statistics of these two countries: the DIAN database records 8 percent fewer transactions than the LFTTD database over the sample period, and the average export shipment size in the DIAN is roughly 4 percent smaller than the corresponding import shipment size in the LFTTD. These discrepancies are not due to difference in minimum shipment sizes and they are not particular to a few sectors, though they are more common among small shipments and they evolve over time. Second, if we rely exclusively on firms' names and addresses, ignoring other shipment characteristics (value, product code, etc.), we are able to match 85 percent of the value of U.S. imports from Colombia in our LFTTD sample with particular Colombian suppliers in the DIAN. Further, fully 97 percent of the value of Colombian exports to the U.S. can be mapped onto particular importers in the U.S. LFTTD. Third, however, match rates at the shipment level within buyer-seller pairs are low. That is, while buyers and sellers can be paired up fairly accurately, only 25-30 percent of the individual transactions in the customs records of the two countries can be matched using fuzzy algorithms at reasonable tolerance levels. Fourth, the manufacturer ID (MANUF_ID) that appears in the LFTTD implies there are roughly twice as many Colombian exporters as actually appear in the DIAN. And similar comments apply to an analogous MANUF_ID variable constructed from importer name and address information in the DIAN. Hence studies that treat each MANUF_ID value as a distinct firm are almost surely overstating the number of foreign firms that engage in trade with the U.S. by a substantial amount. Finally, we conclude that if countries were to require that exporters report standardized shipment identifiers'either invoice numbers or bill of lading/air waybill numbers'it would be far easier to track individual transactions and to identify international discrepancies in reporting.View Full Paper PDF
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Working PaperHousing Booms and the U.S. Productivity Puzzle
January 2020
Working Paper Number:
CES-20-04
The United States has been experiencing a slowdown in productivity growth for more than a decade. I exploit geographic variation across U.S. Metropolitan Statistical Areas (MSAs) to investigate the link between the 2006-2012 decline in house prices (the housing bust) and the productivity slowdown. Instrumental variable estimates support a causal relationship between the housing bust and the productivity slowdown. The results imply that one standard deviation decline in house prices translates into an increment of the productivity gap -- i.e. how much an MSA would have to grow to catch up with the trend -- by 6.9p.p., where the average gap is 14.51%. Using a newly-constructed capital expenditures measure at the MSA level, I find that the long investment slump that came out of the Great Recession explains an important part of this effect. Next, I document that the housing bust led to the investment slump and, ultimately, the productivity slowdown, mostly through the collapse in consumption expenditures that followed the bust. Lastly, I construct a quantitative general equilibrium model that rationalizes these empirical findings, and find that the housing bust is behind roughly 50 percent of the productivity slowdown.View Full Paper PDF
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Working PaperWhat Do Establishments Do When Wages Increase? Evidence from Minimum Wages in the United States
November 2019
Working Paper Number:
CES-19-31
I investigate how establishments adjust their production plans on various margins when wage rates increase. Exploiting state-by-year variation in minimum wage, I analyze U.S. manufacturing plants' responses over a 23-year period. Using instrumental variable method and Census Microdata, I find that when the hourly wage of production workers increases by one percent, manufacturing plants reduce the total hours worked by production workers by 0.7 percent and increase capital expenditures on machinery and equipment by 2.7 percent. The reduction in total hours worked by production workers is driven by intensive-margin changes. The estimated elasticity of substitution between capital and labor is 0.85. Following the wage increases, no statistically significant changes emerge in revenue, materials or total factor productivity. Additionally, I nd that when wage rates increase, establishments are more likely to exit the market. Finally, I provide evidence that when the minimum wage increases the wages of some of the establishments in a firm, the firm also increases the wages for its other establishments.View Full Paper PDF
