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Measuring United States Business Dynamics

Paper Session

Sunday, Jan. 7, 2018 8:00 AM - 10:00 AM

Marriott Philadelphia Downtown, Grand Ballroom Salon L
Hosted By: American Economic Association
  • Chair: John Haltiwanger, University of Maryland

Upcoming Improvements to the Longitudinal Business Database and the Business Dynamics Statistics

Martha Stinson
,
U.S. Census Bureau
Thomas Kirk White
,
U.S. Census Bureau

Abstract

The Business Dynamics Statistics (BDS) provide annual measures of business dynamics (such as job creation and destruction, establishment births and deaths, and firm startups and shutdowns) for the economy and aggregated by establishment and firm characteristics. The BDS is created from the Longitudinal Business Database (LBD), a confidential database available to qualified researchers through secure Federal Statistical Research Data Centers. The use of the LBD as the BDS source data permits tracking establishments and firms over time. As part of the LBD Initiative, the Census Bureau is making several improvements and enhancements to the LBD and BDS, including: (i) reconstructing the LBD/BDS using a longitudinal linking methodology that is as consistent as possible over the entire time series; (ii) filling data gaps and improving data quality by incorporating nearly four decades of data from the Census Bureau’s County Business Patterns (CBP) program as well as recently recovered data from the Census Bureau’s Business Register; (iii) integrating the LBD with another Census Bureau data product, the Business Information Tracking Series (BITS), incorporating the best features of each program; (iv) streamlining and documenting the LBD’s code base to make the LBD/BDS easier to maintain and improve in the future; (v) publishing the entire BDS on a NAICS basis; (vi) implementing a new disclosure avoidance methodology for the BDS.

Business Dynamics of United States Exporters: Integrating Trade Transactions Data With Business Administrative Data

Glenn Baresse
,
U.S. Census Bureau
Fariha Kamal
,
U.S. Census Bureau
Javier Miranda
,
U.S. Census Bureau
Wei Ouyang
,
U.S. Census Bureau

Abstract

This paper describes the Census Bureau’s recent efforts to create a new set of public-use statistics describing the business dynamics of U.S. merchandise exporters. These statistics can be readily used to guide policy and answer a variety of questions such as - which businesses export and when? How many jobs do they create or destroy? What is the size and age of these businesses? How do exporters fare during an economic downturn? Do they outperform non-exporting businesses? What share of businesses and jobs are tied to exporting activities? Are businesses born as exporters (in response to an exporting opportunity) or do they learn to export (perhaps in response to a need to expand to new markets)? These statistics can shed light on these questions by describing business and employment dynamics including firm births and deaths and the jobs created and destroyed through entry, exit, expansions, and contractions by relevant firm characteristics including firm age, firm size, and sector starting in 1993. This paper offers preliminary statistics derived from confidential microdata to illustrate various features of the prototype product. Our preliminary exercises reveal several interesting patterns about merchandise exporting. First, exporting is a rare activity, less than 1% of firms in the U.S. economy are exporters. Second, most exporting firms are large and old and tend to operate in the manufacturing and wholesale sectors. Thus, exporters account for about 40% of total employment in the U.S. economy. Third, exporting firms exhibit lower job creation rates compared to non-exporters, however, they also exhibit much lower job destruction rates such that, on net, exporters tend to exhibit higher net job creation rates.

Business Dynamic Statistics of Innovative Firms

Nathan Goldschlag
,
U.S. Census Bureau
Elisabeth Perlman
,
U.S. Census Bureau

Abstract

A key driver of economic growth is the reallocation of resources from low to high productivity activities. Innovation plays an important role in this regard by introducing new products, services, and business methods that ultimately lead to increased productivity and rising living standards. Traditional measures of innovation, particularly those based on aggregate inputs, are increasingly unable to capture the breadth and depth of innovation in modern economies. In this paper, we describe an effort at the US Census Bureau, the Business Dynamics Statistics of Innovative Firms (BDS-IF) project, which aims to address these challenges by extending the Business Dynamics Statistics data to include new measures of innovative activity. The BDS-IF project will produce measures of firm, establishment, and employment flows by firm age, firm size, and industry for the subset of firms engaged in activities related to innovation. These activities include patenting and trademarking, the employment of STEM workers, and R&D expenditures. The flexibility of the underlying data infrastructure allows this measurement agenda to be extended to include copyright activity, management practices, and high growth firms.

Business Dynamics and Worker Earnings

Kristin McCue
,
U.S. Census Bureau
Martha Stinson
,
U.S. Census Bureau

Abstract

This paper discusses construction of a new longitudinal database at the U.S. Census Bureau that describes firms and their workforces over time. We integrate administrative information on worker earnings and demographics with the firm database that underlies Census’s Business Dynamics Statistics. We then use these data to examine variation in earnings distributions by firm age, industry, and geography over the period 2005-2015, focusing on the relationship between firm dynamics and changes in earnings for different age groups within the workforce. We then propose ways to use this new database to provide public statistics on earnings distributions by firm size, firm age, industry, and geography and present an initial prototype.
Information about firms’ earnings and age distributions will complement already published statistics on firm dynamics by giving further evidence about what type of firms survive and how this has changed over time. These new human capital statistics will show how earnings distributions change as firms age. If successful firms keep only the most productive workers, then over time, their earnings distributions may become more compressed. But if successful firms grow and have a more diverse workforce with respect to age and skill, earnings distributions may widen. These types of changes will likely be different across industries and geography and may have changed over time. These statistics also have the potential to provide new evidence on trends in job polarization. Outsourcing and automation have been associated with a decline in the kinds of routine jobs that historically employed a substantial share of workers in the middle of the earnings distribution. If such trends have continued, we would expect to find that firms in the same size and age class have more compressed earnings distributions in the 2010s than in the earlier years.
Discussant(s)
Timothy Dunne
,
Federal Reserve Bank of Atlanta
J. Bradford Jensen
,
Georgetown University
William R. Kerr
,
Harvard University
Rebecca Zarutskie
,
Federal Reserve Board
JEL Classifications
  • C8 - Data Collection and Data Estimation Methodology; Computer Programs
  • L2 - Firm Objectives, Organization, and Behavior