New Census Bureau Data for Entrepreneurship Research Ron S Jarmin US Census Bureau OECD November 19, 2007 This report is released to inform interested parties of ongoing research and to encourage discussion of work in progress. The views expressed are not necessarily those of the U.S. Census Bureau.

Introduction Statistical Agencies, such as the Census Bureau, produce a wealth of information about the business population. Publicly available data, however, have shortcomings for entrepreneurship research. –Insufficient attention to dynamics –No explicit role for business age

Raw materials for better data mostly already exist Survey and Administrative Micro Data sitting in most statistical agencies contain much of what’s needed. But need substantial value added before useful to skilled micro data researchers or ready for use in public release tabulations.

Census Bureau Micro Data Infrastructure for Entrepreneurship Research Longitudinal Business Database (LBD) Integrated Longitudinal Business Database (ILBD = LBD + Self- employed) LEHD – Linked employer-employee data Economic Census and Survey data

New public release products being developed from the LBD Business Demography Series (BDS) –Public release tabulations (follow EIP protocols where appropriate) –Developed with support from the Kauffman Foundation –First tables to be released soon. Synthetic LBD –Releasable micro data based on multiple imputation –Developed with support from the National Science Foundation –Much work needed before release

The BDS New Census public use files from LBD/BR (support from Kauffman Foundation) –Coverage –CBP Universe –Establishment level with firm characteristics –Focus on both business and employment dynamics Unique Features –Long Time Series –Firm and Establishment Age –Interactions with Firm and Establishment Size

The BDS – Current State Statistics –Establishment and Firm Births, Deaths and Continuers –Job creation From births and expansions –Job destruction From deaths and contractions –Excess Job Reallocation By categories –Firm Age –Firm Size –Industrial Sector –Geography

The BDS Other tables planned (e.g. high growth firms etc) Comparisons and Measurement Issues –Differences with CBP –Differences with BED and QCEW –Measurement of Size (vs. SUSB) –Treatment of Outliers

Distribution of Firms, Establishments and Employment by Firm Size

Distribution of Firms, Establishments and Employment by Firm Age

The BDS: Net Job Growth by Firm Size and Age

The BDS: Net Employment by Firm Size and Age

High Growth Firms

Defining “Gazelles” What is larger context? –Identifying gazelles is only first step –Job creation and destruction relative to old/large? –Job creation in the wider economy? –Tracking over a longer time horizon. What happens to them? Don’t they get eaten by lions? Other Questions and Challenges –Role in Business cycle  long time series –Wage dynamics  linking to other data –What makes them successful  connections to supply chain …

Summary BDS will be a rich source of information to examine –Business demography –Creative destruction/innovation –Business cycle dynamics –Role of cohorts, young/small vs. large/old –Labor market dynamics

But… Still much more limited than access to micro data. Synthetic LBD will hopefully prove useful to a broad range of researchers including those wishing to do international comparisons.

CBP In-Scope Sectors: –agricultural services, forestry, and fishing; –mining; –construction; –manufacturing; –transportation and public utilities; –wholesale trade; –retail trade; –finance, insurance, and real estate; –services. Exclusions: –self-employed people, –domestic service workers, –railroad employees, –agricultural production workers, –most government employees, –and employees on ocean-borne vessels or in foreign countries. Employment: –full- and part-time March 12 employees. –Included are employees on paid sick leave,holidays, and vacations; –not included are proprietors and partners of unincorporated businesses. Payroll: –Total payroll includes all forms of compensation, such as salaries, wages, reported tips, commissions, bonuses, vacation allowances, sick- leave pay, employee contributions to qualified pension plans, and the value of taxable fringe benefits. Establishments: –This series excludes governmental establishments except for liquor stores (SIC 592), wholesale liquor establishments (SIC 518), depository institutions (SIC 60), federal and federally sponsored credit agencies (SIC 611), and hospitals (SIC 806).