Exploring Differences in Employment between Household and Establishment Data Katharine G. Abraham,...

Exploring Differences in Employment between Household and Establishment Data

Katharine G. Abraham, University of Maryland and NBERJohn Haltiwanger, University of Maryland and NBERKristin Sandusky, U.S. Census BureauJames Spletzer, U.S. Bureau of Labor Statistics

Overview Employer survey (CES) employment grew faster

than household survey (CPS) employment from 1997 through 2001, but CPS employment outpaced CES employment from 2001 to 2003 Similar cyclical pattern observed in other

periods Discrepancies have provoked much discussion but

remain a puzzle We use CPS records matched to UI wage records for

the same individuals to explore sources of discrepancy between employer-reported and household-reported employment

CPS versus CES employment

CPS employment Number of people Includes wage and

salary, self-employed, unpaid family workers

Worked 1 hour, or with a job but not at work

Week of 12th

Person totals controlled to Census population estimates

CES employment Number of jobs Includes only non-farm

wage and salary workers

On payroll

Payroll period including the 12th

Employment counts benchmarked to administrative data

Adjusted CPS employment, 2004 (in thousands) Payroll jobs (CES) 131,480

Household employment (CPS) 139,252

Less: Agriculture 2,232

Nonagricultural self-employed 9,467

Nonag. unpaid family workers 90

Private household workers 779

Unpaid absences 1,926

Total 14,493

Plus: Multiple jobholders 7,067

Adjusted household employment 131,825

0.98

0.99

1.00

1.01

1.02

1.03

1.04

1.05

1.06

1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004

0.98

0.99

1.00

1.01

1.02

1.03

1.04

1.05

1.06

Chart 2. Ratio of establishment survey employment to household survey nonagricultural wage and salary employment, 1948-2004

What explains recent discrepancies in CPS and CES employment trends?

Sampling error in the two surveys Persons under age 16 and members of the

institutionalized population excluded from the CPS employment counts

Possible issues with the treatment of government-subsidized jobs

Incomplete accounting for multiple jobs in the adjusted CPS employment series Adjusted series ignores jobs beyond 2nd job Adjusted series ignores secondary civilian jobs

held by those in the Armed Forces

What explains recent discrepancies in CPS and CES employment trends? (cont’d)

Benchmarking of the CES estimates Population controls used for CPS estimates Classification of CPS jobs as wage-and-

salary employment versus self-employment Missing marginal jobs in CPS Missing “off-the-books” or non-standard

employment in CES Pro-cyclical turnover that affects number of

jobs during longer CES payroll periods relative to single CPS reference week

Measurement framework

Linked CPS-UI wage records microdata

Individual holds job in UI

No Yes

Individualholds jobin CPS

No X1 X2

Yes X3 X4


Number of persons employed in UI X2 + X4

Number of persons employed in CPSX3 + X4

Difference in number of personsemployed (UI - CPS)

X2 – X3


Linked CPS-UI wage records microdata, X4 sample

People holding stated number of jobs in UI

One Two plus

Peopleholding stated number of jobs in CPS

One Y1 Y2

Two plus

Y3 Y4


Number of multiple job holders in UI

Y2 + Y4 (+ part X2 )

Number of multiple job holders in CPS

Y3 + Y4 (+ part X3 )

Difference in number of multiple job holders(UI – CPS)

Y2 – Y3 (+ part X2 – part X3 )

Marginal (short duration or low earnings) jobs that are not reported by household survey respondents grow in number during business cycle expansions

X2 procyclical Y2 procyclical

”Off-the-books” or non-standard jobs that are not reported by employers shrink innumber during business cycle expansions

X3 countercyclicalY3 countercyclical

Increases in the job-changing rate duringbusiness cycle expansions lead to relative increases in employment counts

Y2 procyclical


Research strategy Use UI and CPS data to study levels and changes

over time in number of people by employment status (X2, X3) and job count classification (Y2, Y3) Are aggregate movements consistent with our

hypotheses? Examine characteristics of people and jobs in

different cells Are personal and job characteristics of people in

different cells consistent with our hypotheses? Use information on changes in person and job

characteristics over time to simulate movements in X2, X3, Y2, Y3 series Do simulated series reproduce the discrepancy that

motivated our study?

Linking CPS and UI records Census Longitudinal Employer-Household

Dynamics (LEHD) program has UI wage record data for 17 states from 1996 to present

CPS data monthly and UI data quarterly Need to construct quarterly CPS records for

comparison with quarterly UI records for same individuals

Protected Identity Key (PIK) based on SSN available for 70-80 percent of March CPS supplement responses and all UI wage records

Analysis sample Analysis sample consists of March CPS respondents

age 16 and older who live in 16 states covered by LEHD data (17 states minus Maryland) Maryland dropped because more than 15 percent of

residents work in another state or DC Because quarterly information required for

comparisons with UI data, sample limited to those with CPS responses for January, February and March

Because CPS records must be matched to the UI wage records, sample limited to CPS records with a PIK

Propensity score methods used to adjust CPS weights to account for sample restrictions

Constructing quarterly employment records In both data sets, in-scope employment

includes individuals with a non-agricultural private sector, state government or local government wage-and-salary job

Information on job changes and multiple jobs held simultaneously used to categorize people as holding one in-scope job or two plus in-scope jobs in CPS Most certain a job change has occurred if question

asked and answered directly, but not always asked Multiple job question asked every month, but class of

second job asked only in outgoing rotation group Will discuss results for more restrictive of two criteria

Number of jobs in UI data based on number of wage records

Trends in national CES versus CPS, linked sample UI versus CPS

Figure 2a-2: CPS - CES Employment TrendsNational, All Sectors, March Employment, SA

100

105

110

115

1996 1997 1998 1999 2000 2001 2002 2003

CPS CES

Figure 2a-1: CPS - CES Employment TrendsNational, All Sectors, March Employment, SA

115,000

125,000

135,000

145,000

1996 1997 1998 1999 2000 2001 2002 2003

CPS CES

Figure 2e-2: CPS - UI Employment Trends16 States, PSL, 1st Quarter Employment, NSA

100

106

112

118

1996 1997 1998 1999 2000 2001 2002 2003

CPS (w eighted) UI (w eighted)

Figure 2e-1: CPS - UI Employment Trends16 States, PSL, 1st Quarter Employment, NSA

55,000

60,000

65,000

70,000

1996 1997 1998 1999 2000 2001 2002 2003

CPS (w eighted) UI (w eighted)

Discrepancies in employment status, 1996-2003

Not in-scope worker in UI

In-scope worker in UI

Not in-scope worker in CPS

Overall share 37.1% 3.4%

Row share 91.7% 8.3%

Column share 77.9% 6.4%

In-scope worker in CPS


Row share 17.6% 82.4%


Discrepancies in job count status, restrictive CPS classification, 1996-2003

Single wage and salary job in UI

Two plus wage and salary jobs in UI

Single wage and salary job in CPS


Row share 88.7% 11.3%


Two plus wage and salary jobs in CPS


Row share 44.6% 55.4%


Trend in X2 and X3

0

3

6

9

12

1996 1997 1998 1999 2000 2001 2002 2003

X2: Employed in UI, not in CPS X3: Employed in CPS, not in UI

Trend in Y2 and Y3, more restrictive CPS multiple job definition

0

2

4

6

1996 1997 1998 1999 2000 2001 2002 2003

Y2: Multiple Job Holder in UI, 1 Job in CPSY3: Multiple Job Holder in CPS, 1 Job in UI

Which people would we expect to find in X2 and X3?

Expect people in X2 to hold jobs they consider marginal Personal characteristics: young (students), older

(retired) Job characteristics: short duration, low hours, low

earnings Expect people in X3 to hold “off-the-books” or non-

standard jobs Personal characteristics: older, less than high school

education, college or higher education Job characteristics: short duration, low hours, low

earnings; types of work (industries and occupations) in which there are many non-wage-and-salary workers (self-employed, contractors, consultants)

Factors affecting probability in-scope UI worker not an in-scope CPS worker (X2)

Age 16-24 -0.021**

Age 25-34 -0.005

Age 55-64 0.019**

Age 65 plus 0.088**

Less than high school 0.007*

Some college -0.000

College graduate 0.002

More than college 0.010*

Black 0.022**

Other nonwhite 0.009*

Male 0.006**

Married -0.009**

Foreign-born 0.026**

Non-proxy interview 0.006**

Any long UI jobs? -0.201**

Two or more UI jobs? -0.018**

UI earnings under $1K 0.280**

UI earnings $1K-$2.5K 0.057**

UI earnings $12.5K-$25K -0.012**

UI earnings over $25K -0.000

Factors affecting probability in-scope CPS worker not an in-scope UI worker (X3)

Age 16-24 -0.026**

Age 25-34 -0.020**

Age 55-64 0.029**

Age 65 plus 0.105**

Less than high school 0.018*

Some college 0.006

College graduate 0.017**

More than college 0.055*

Black -0.019**

Other nonwhite 0.006

Male 0.025**

Married -0.008*


Non-proxy interview -0.004

Work discontinuity? 0.152**

Probability a contractor 0.091**

Any full-time jobs -0.066**

Which people would we expect to find in Y2 and Y3?

Expect people in Y2 to hold marginal second jobs and/or have two jobs counted when they change employer Personal characteristics: young (high turnover) Job characteristics: short duration, low hours, low

earnings Expect people in Y3 to hold “off-the-books” or non-

standard jobs Personal characteristics: older, less than high school

education, college or higher education Job characteristics: short duration, low hours, low

earnings; types of work (industries and occupations) in which there are many non-wage-and-salary workers (self-employed, contractors, consultants)

Factors affecting probability UI multiple job holder has only a single CPS job (Y2, restrictive)

Age 16-24 0.002

Age 25-34 0.031*

Age 55-64 0.035

Age 65 plus 0.062

Less than high school 0.013

Some college -0.051*

College graduate -0.060**

More than college -0.082**

Black 0.097**

Other nonwhite 0.003

Male 0.007

Married -0.028*


Non-proxy interview -0.026*

Any long 2nd UI jobs? -0.110**

Three or more UI jobs? -0.002

UI 2nd job under $1K -0.014

UI 2nd job $1K-$2.5K -0.157**

UI 2nd job $12.5K-$25K 0.210**

UI 2nd job over $25K 0.250**

Factors affecting probability CPS multiple job holder has only a single UI job (Y3, restrictive)

Age 16-24 -0.117**

Age 25-34 -0.033

Age 55-64 0.087**

Age 65 plus 0.012

Less than high school 0.014

Some college 0.004

College graduate 0.045*

More than college 0.117**

Black -0.038

Other nonwhite -0.037

Male 0.047**

Married -0.018

Foreign-born 0.031

Non-proxy interview -0.040*

Simultaneous mult. jobs -0.102**

Multiple jobs all 3 months -0.060**

16+ hrs/wk on 2nd job(s) -0.124**

Actual and predicted X2 and X3

0

3

6

9

12

1996 1997 1998 1999 2000 2001 2002 2003

X2 (Actual) X2 (Predicted) X3 (Actual) X3 (Predicted)

Predicted shares of UI workers not found in CPS (X2)

0.060

0.065

0.070

0.075

1996 1997 1998 1999 2000 2001 2002 2003

Demographic Characteristics Job Characteristics

All Characteristics

Predicted shares of CPS workers not found in UI (X3)

0.170

0.175

0.180

0.185

1996 1997 1998 1999 2000 2001 2002 2003


All Characteristics

Actual and predicted Y2 and Y3, more restrictive CPS definition

0

2

4

6

1996 1997 1998 1999 2000 2001 2002 2003

Y2 (Actual) Y2 (Predicted) Y3 (Actual) Y3 (Predicted)

Predicted shares of UI multiple job holders with a single CPS job (Y2)

0.64

0.65

0.66

0.67

1996 1997 1998 1999 2000 2001 2002 2003


All Characteristics

Predicted shares of CPS multiple job holders with a single UI job (Y3)

0.44

0.45

0.46

0.47

0.48

1996 1997 1998 1999 2000 2001 2002 2003


All Characteristics

Summary Large discrepancies at the micro level between

employment and job count status for same individuals in UI and CPS data

Characteristics of those in off-diagonal cells generally consistent with expectations

No single story about recent divergence between UI (employer reported) and CPS (household reported) employment Growth in number of multiple job holders in UI not

measured by CPS important 1996-1999 (marginal 2nd jobs, employee turnover)

Growth in number of workers measured in CPS but not UI important 2001-2003 (off-the-books or non-standard jobs)

Comments and suggestions?

This is work in progress and we would appreciate your thoughts about what we’ve done and next steps we should take

Exploring Differences in Employment between Household and Establishment Data Katharine G. Abraham,...

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