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Papers Containing Tag(s): 'BLS Handbook of Methods'

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  • Working Paper

    Entrepreneurial Teams: Diversity of Skills and Early-Stage Growth

    December 2020

    Working Paper Number:

    CES-20-45

    We use employer-employee linked data to track the employment histories of team members prior to startup formation for a full cohort of new firms in the U.S. Using pre-startup industry experience to measure skillsets, we find that startups that have founding teams with more diverse collective skillsets grow faster than peer firms in the same industries and local economies. A one standard deviation increase in teams' skill diversity is associated with an increase in five-year employment (sales) growth of 16% (10%) from the mean. The effects are stronger among startups in innovative industries and among startups facing greater ex-ante uncertainty. Moreover, the results are robust to a variety of approaches to address the endogeneity of team composition. Overall, our results suggest that teams with more diverse collective skillsets adapt their strategies more successfully in the uncertain environments faced by (innovative) startup firms.
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  • Working Paper

    Sorting Between and Within Industries: A Testable Model of Assortative Matching

    January 2017

    Working Paper Number:

    CES-17-43

    We test Shimer's (2005) theory of the sorting of workers between and within industrial sectors based on directed search with coordination frictions, deliberately maintaining its static general equilibrium framework. We fit the model to sector-specific wage, vacancy and output data, including publicly-available statistics that characterize the distribution of worker and employer wage heterogeneity across sectors. Our empirical method is general and can be applied to a broad class of assignment models. The results indicate that industries are the loci of sorting-more productive workers are employed in more productive industries. The evidence confirm that strong assortative matching can be present even when worker and employer components of wage heterogeneity are weakly correlated.
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  • Working Paper

    "It's Not You, It's Me": Breakup In U.S.-China Trade Relationships

    February 2014

    Authors: Ryan Monarch

    Working Paper Number:

    CES-14-08

    This paper uses confidential U.S. Customs data on U.S. importers and their Chinese exporters toinvestigate the frictions from changing exporting partners. High costs from switching partners can affect the efficiency of buyer-supplier matches by impeding the movement of importers from high to lower cost exporters. I test the significance of this channel using U.S. import data, which identifies firms on both sides (U.S. and foreign) of an international trade relationship, the location of the foreign supplier, and values and quantities for the universe of U.S. import transactions. Using transactions with China from 2003-2008, I find evidence suggesting that barriers to switching exporters are considerable: 45% of arm's-length importers maintain their partner from one year to the next, and one-third of all switching importers remain in the same city as their original partner. In addition, importers paying the highest prices are the most likely to change their exporting partner. Guided by these empirical regularities, I propose and structurally estimate a dynamic discrete choice model of exporter choice, embedded in a heterogeneous firm model of international trade. In the model, importing firms choose a future partner using information for each choice, but are subject to partner and location-specific costs if they decide to switch their current partner. Structural estimates of switching costs are large, and heterogeneous across industries. For the random sample of 50 industries I use, halving switching costs shrinks the fraction of importers remaining with their partner from 57% to 18%, and this improvement in match efficiency leads to a 12.5% decrease in the U.S.-China Import Price Index.
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  • Working Paper

    Employer-to-Employer Flows in the United States: Estimates Using Linked Employer-Employee Data

    September 2010

    Working Paper Number:

    CES-10-26

    We use administrative data linking workers and firms to study employer-to-employer flows. After discussing how to identify such flows in quarterly data, we investigate their basic empirical patterns. We find that the pace of employer-to-employer flows is high, representing about 4 percent of employment and 30 percent of separations each quarter. The pace of employer-to-employer flows is highly procyclical, and varies systematically across worker, job and employer characteristics. Our findings regarding job tenure and earnings dynamics suggest that for those workers moving directly to new jobs, the new jobs are generally better jobs; however, this pattern is highly procyclical. There are rich patterns in terms of origin and destination of industries. We find somewhat surprisingly that more than half of the workers making employer-to-employer transitions switch even broadly-defined industries (NAICS supersectors).
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  • Working Paper

    Employment that is not covered by state unemployment insurance Laws

    April 2007

    Authors: David W. Stevens

    Working Paper Number:

    tp-2007-04

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  • Working Paper

    Efficiency Implications of Corporate Diversification: Evidence from Micro Data

    November 2006

    Working Paper Number:

    CES-06-26

    In this study, we contribute to the ongoing research on the rationales for corporate diversification. Using plant-level data from the U.S. Census Bureau, we examine whether combining several lines of business in one entity leads to increased productive efficiency. Studying the direct effect of diversification on efficiency allows us to discern between two major theories of corporate diversification: the synergy hypothesis and the agency cost hypothesis. To measure productive efficiency, we employ a non-parametric approach'a test based on Varian's Weak Axiom of Profit Maximization (WAPM). This method has several advantages over other conventional measures of productive efficiency. Most importantly, it allows one to perform the efficiency test without relying on assumptions about the functional form of the underlying production function. To the best of our knowledge, this study is the first application of the WAPM test to a large sample of non-financial firms. The study provides evidence that business segments of diversified firms are more efficient compared to single-segment firms in the same industry. This finding suggests that the existence of the so-called 'diversification discount' cannot be explained by efficiency differences between multi-segment and focused firms. Furthermore, more efficient segments tend to be vertically integrated with others segments in the same firm and to have been added through acquisitions rather than grown internally. Overall, the results of this study indicate that corporate diversification is value-enhancing, and that it is not necessarily driven by managers' pursuit of their private benefits.
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  • Working Paper

    Is it Who You Are, Where You Work, or With Whom You Work? Reassessing the Relationship Between Skill Segregation and Wage Inequality

    June 2002

    Working Paper Number:

    tp-2002-10

    In a recent paper, Kremer & Maskin (QJE, forthcoming) develop an assignment model in which increases in the dispersion and mean of the skill distribution can lead simultaneously to increases in wage inequality and skill segregation. They then present evidence that, concurrent with rising wage inequality, wage segregation increased for production workers in the United States between 1975 and 1986. My paper argues that relying on wages as a proxy for skill may be problematic. Using a newly developed longitudinal dataset linking virtually the entire universe of workers in the state of Illinois to their employers, I decompose wages into components due, not only to person and firm heterogeneity, but also to the characteristics of their co-workers. Such "co-worker effects" capture the impact of a weighted sum of the characteristics of all workers in a firm on each individual employee's wage. While rising wage segregation can result from greater skill segregation, it may also be due to changes in the variance of co-worker effects in the economy, or to changes in the covariance between the person, firm, and co-worker components of wages. Due to the limited availability of demographic information on workers, I rely on the person specific component of wages to proxy for co-worker "skills." Because these person effects are unknown ex ante, I implement an iterative estimation approach where they are first obtained from a preliminary regression that excludes any role for co-workers. Because virtually all person and firm effects are identified, the approach yields consistent estimates of the co-worker parameters. My estimates imply that a one standard deviation increase in both a firm's average person effect and experience level is associated, on average, with wage increases of 3% to 5%. Firms that increase the wage premia they pay workers appear to do so in conjunction with upgrading worker quality. Interestingly, the average effect masks considerable variation in the relative importance of co-workers across industries. After allowing the co-worker parameters to vary across 2 digit industries, I find that industry average co-worker effects explain 26% of observed inter-industry wage differentials. Finally, I decompose the overall distribution of wages into components due to persons, firms, and coworkers. While co-worker effects do indeed serve to exacerbate wage inequality, the tendency for high and low skilled workers to sort non-randomly into firms plays a considerably more prominent role.
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  • Working Paper

    The Measurement of Human Capital in the U.S. Economy

    April 2002

    Working Paper Number:

    tp-2002-09

    We develop a new approach to measuring human capital that permits the distinction of both observable and unobservable dimensions of skill by associating human capital with the portable part of an individual's wage rate. Using new large-scale, integrated employer-employee data containing information on 68 million individuals and 3.6 million firms, we explain a very large proportion (84%) of the total variation in wages rates and attribute substantial variation to both individual and employer heterogeneity. While the wage distribution remained largely unchanged between 1992-1997, we document a pronounced right shift in the overall distribution of human capital. Most workers entering our sample, while less experienced, were otherwise more highly skilled, a difference which can be attributed almost exclusively to unobservables. Nevertheless, compared to exiters and continuers, entrants exhibited a greater tendency to match to firms paying below average internal wages. Firms reduced employment shares of low skilled workers and increased employment shares of high skilled workers in virtually every industry. Our results strongly suggest that the distribution of human capital will continue to shift to the right, implying a continuing up-skilling of the employed labor force.
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  • Working Paper

    Employment that is not covered by state unemployment

    January 2002

    Authors: David W. Stevens

    Working Paper Number:

    tp-2002-16

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  • Working Paper

    Large Plant Data in the LRD: Selection of a Sample for Estimation

    March 1999

    Working Paper Number:

    CES-99-06

    This paper describes preliminary work with the LRD during our tenure at the Census Bureau as participants in the ASA/NSF/Census Research Program. The objective of the work described here were two-fold. First, we wanted to examine the suitableness of these data for the calculation of plant-level productivity indexes, following procedures typically implemented with time series data. Second, we wanted to select a small number of 2-digit industry groups that would be well suited to the estimation of production functions and systems of factor share equations and factor demand forecasting equations with system-wide techniques. This description of our initial work may be useful to other researchers who are interested in the LRD for the analysis of productivity growth and/or the estimation of systems of factor equations, because the specific results reported in this memo suggest that the data are of good quality, or because the nature of the tasks undertaken provides insight into issues that arise in the analysis of longitudinal establishment data.
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