Use of administrative data in statistics - challenges and opportunities ICES III End Panel Discussion Montreal, June 2007 Heli Jeskanen-Sundström Statistics Finland

June Outline About the use of administrative data at Statistics Finland in general Preconditions Use of administrative data in business statistics Strengths and weaknesses Benefits to users of statistics Some concluding remarks

June About the use of administrative data at Statistics Finland Long experience, since the 1970 population census first in social and demographic statistics, nowadays more and more also in business and environmental statistics Statistics Finland is a ”heavy user”: about 96% of input data comes from administrative sources (as measured in number of statistical units times number of variables) Typically there is some direct data collection on every business statistics (mainly from large enterprises)

June Ways of utilising administrative data Direct use of register data Register estimation Combined use of survey and register data additional information from registers use as sampling frame non-response control imputation determining the structure of non-response

June Preconditions Universal ID-schemes -Persons -Organisations -Buildings, apartments Acceptance by the people, business and administration WIDE use Strict confidentiality in statistics Up-to-date legislation - statistical law - personal information protection Well developed IT infrastructure in administration Possibility to use in statistics, also to COMBINE

June Examples of totally register-based statistics in Statistics Finland Population statistics Population censuses Building and dwelling statistics Statistics on housing conditions Regional employment statistics Statistics about justice and crime Election statistics Income statistics

June Examples of statistics in which register data are used as combined to survey data Income distribution statistics Household budget survey Labour force statistics Wage and salary statistics Business statistics

June VAT value added tax declarations data (monthly) --> turnover (STS) ---> estimates of turnover class (Business register) Employers wage payment data (monthly) --> wages and salaries (STS) --> estimates of number of employees (Business register) Company tax (yearly accounts) --> turnover etc. (SBS, Business register) Employers declaration on wages and salaries paid for each employee (yearly) --> estimates of man-years (Business register) Customer register of Tax authorities --> names, addresses,... (Business reg.) Individual tax forms --> income, expenditure, assets, … (agricultural enterprises) Use of tax data in business statistics

June Number of enterprises Direct collection Administrative data Structural Business Statistics Business Register over Short Term Business Statistics turnover wages and salaries Even for enterprises in direct collection some data are taken from administrative sources Direct collection vs. use of administrative data from tax authorities in main business statistics

June Strengths of register-based statistics production Total coverage for lower costs Possibility to link with other data sources (common identifiers) and to produce new type of data Quality of data: heavy sanctions for enterprises if data are not delivered or if false data are delivered to tax authorities No additional burden to respondents Confidentiality advantages

June Weaknesses of register-based statistics production Only variables covered by registers are available Some restrictions on definitions of units and variables Vulnerable to changes in legislation and administrative practices Dependence on data suppliers Timeliness of administrative data is not always good enough

June Benefits to users of statistics Register-based databases are the goldmines of empirical research, e.g. sociological, health and economic analysis Possibility to create longitudinal data files (like data file of living conditions and causes of death and FLEED, Finnish Longitudinal Employer-Employee Data) New kinds of statistics (e.g. flow statistics on the rise of social status or change of labour market status) Easier to produce regional statistics, small area statistics and GIS

June New services to researchers Statistics Finland’s research laboratory Mostly business statistics data and combined employee- enterprise data Micro-level dynamics of productivity growth Firm demography, employment patterns FLEED data file: Finnish Longitudinal Employer- Employee Data Financial statements panel, R & D panel, ICT panel, Industrial statistics panel

June Some concluding remarks The use of administrative data decreases costs of the NSI especially with regard to data collection Quality assurance and quality control systems have to be developed, they differ from survey based statistics In business statistics, surveyed data play a big role in quality checking of administrative data Co-ordination of inward data flows is extremely important Extensive and continuous co-operation with the authorities takes also time and resources Net benefits? All win: lower response burden, somewhat lower costs of the NSI but extremely rich and useful data files

June Thank you for your kind attention Use of Registers and Administrative Data Sources for Statistical Purposes Best Practices of Statistics Finland Can be downloaded in pdf-format in address A joint Nordic publication “Register-based statistics in the Nordic countries - Review of best practices with focus on population and social statistics” (will be published by the UNECE this year)