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
Measurement framework
Number of persons employed in UI X2 + X4
Number of persons employed in CPSX3 + X4
Difference in number of personsemployed (UI - CPS)
X2 – X3
Measurement framework
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
Measurement framework
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
Measurement framework
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
Overall share 10.5% 49.1%
Row share 17.6% 82.4%
Column share 22.1% 93.6%
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
Overall share 81.3% 10.4%
Row share 88.7% 11.3%
Column share 95.6% 69.2%
Two plus wage and salary jobs in CPS
Overall share 3.7% 4.6%
Row share 44.6% 55.4%
Column share 4.4% 30.8%
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*
Foreign-born 0.040**
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*
Foreign-born 0.057**
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
Demographic Characteristics Job Characteristics
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
Demographic Characteristics Job Characteristics
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
Demographic Characteristics Job Characteristics
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?
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