1. Overview of the Bureau of Economic Analysis Regional Accounts at the BEA Robert L. Brown Monitoring Mississippi: Data & Tools for Understanding Our State and Local Economies Jackson, Mississippi April 3, 2008

2. www.bea.gov BEA Mission  To promote a better understanding of the U.S. economy by providing the most timely, relevant, and accurate economic accounts data in an objective and cost- effective manner  The nation’s economic accountant: comprehensive double-entry accounts and economics

3. www.bea.gov What Do We Produce?  National Economic Accounts  Gross Domestic Product (GDP)  Personal Income  Price Measures  International Economic Accounts  International transactions  Direct investments  Operations of US and foreign multinational companies  Industry Accounts  Input-output accounts  GDP by industry  Travel and tourism satellite account

4. www.bea.gov What do we produce?  Regional economic accounts  Gross domestic product (GDP) by state  Prototype estimates of GDP for metropolitan areas  Personal income for states and local areas  Regional economic multipliers—RIMS II

5. www.bea.gov Gross Domestic Product (GDP) by State  Most comprehensive measure of overall state economic activity  GDP by State is the sum of  Compensation of employees  Gross operating surplus  Taxes on production and imports  1963-2006 estimates  Available 6 months after end of year

6. www.bea.gov GDP for Metropolitan Areas  Prototype estimates of GDP for metro areas  2001-2005 released in September 2007  Update planned for Fall 2008

7. www.bea.gov Personal income  The most current, comprehensive and consistent measure available of household income  Comprehensive: measures income received by persons from  production (returns to labor and capital)  business and government transfers  Consistent across time and geography

8. www.bea.gov Relation of GDP by State to Personal Income (PI) GDP by State PI Accrual basis  Disbursement basis  Compensation by place of work  Wages and salaries  Employer contributions for employee pension and insurance funds  Employer contributions for government social insurance  Proprietors’ income  Taxes on production and imports less subsidies  Corporate income  Rental income  Receipts on assets (dividends, interest)  Transfer receipts (Social Security benefits, Medicare, Medicaid) 

9. www.bea.gov State personal income  Quarterly estimates by place of residence from 1948  3 months after the end of the quarter  Annual estimates by place of residence from 1929  Preliminary 3 months after end of year  Detailed 9 months after the end of the year  Includes per capita and disposable personal income estimates  Annual earnings, compensation, wages, and employment by industry by place of work

10. www.bea.gov Local area personal income  Annual data from 1969  Metro area now released 9 months after end of year  County compensation released 12 months after end of year  County PI released 16 months after end of year  Geographic availability:  3,111 counties  363 Metropolitan Areas  576 Micropolitan Areas  179 BEA Economic Areas  Industry detail by place of work  Compensation by county and industry available 12 months after reference year  Earnings and employment county available 16 month after end of year

11. www.bea.gov Personal income growth rates across 3111 counties, 2004-05

12. www.bea.gov Uses of BEA’s regional personal income  By the US Govt, to distribute >$215 billion in federal funds to states  By the states, to develop state government revenue and expenditure estimates  21 states have tax or spending limits tied to state personal income  By business, to determine areas for new business location and expansion decisions  Local areas for impact statements, income and employment dynamics analysis

13. www.bea.gov Regional Input-Output Modeling System RIMS  Multipliers show impact of output change in any industries on 60 industry groups and the area total  Effects on output, employment, and labor earnings  Customized product produced for a fee

14. www.bea.gov

16. What’s Behind the Regional Personal Income Statistics, And What Lies Ahead

17. www.bea.gov Key local area statistics  Total personal income  All income received by residents  Per capita personal income  Personal income divided by population  Indicator of economic well-being  Earnings by place of work and by industry  Proxy for production  Industrial structure  Dividends, interest, and rent  Income from assets and housing  Transfer receipts  Social Security, government-administered medical, income maintenance

18. www.bea.gov Alternative Incomes

19. www.bea.gov Per Capita Income Change 2004-05 (Dollars)

20. www.bea.gov Per Capita Income, 2005, dollars

21. www.bea.gov How We Produce the Estimates  Administrative record information  Advantage--provides detailed information at low cost  Disadvantage--does not precisely match what is being estimated—must make adjustments to compensate for differences  Some census data--quinquennial Agriculture and decennial Population and Housing  Very little from survey information

22. www.bea.gov Sources of Data Personal Income BLSIRSSSACMSOther 60% 23% 6% 5%

23. www.bea.gov Derivation of Personal Income Wage and salary disbursements + Supplements to wages and salaries = Compensation + Proprietors’ income = Earnings (place of work) —Contributions for govt. social insurance + Adjustment for residence = Net Earnings (place of residence) + Dividends, interest, and rent + Personal current transfer receipts = Personal income

24. www.bea.gov Wage & Salary Disbursements  55% of personal income (2005)  Based primarily on Quarterly Census of Employment and Wages (QCEW) report  Byproduct of Unemployment Insurance (UI) program  Excellent quality--Most workers are covered by UI  Other data sources used for 6% of noncovered workers & under-reported wages & tips  Data are by place of work

25. www.bea.gov Supplements to Wages & Salaries  13% of personal income  Employer contributions to:  Pension & private insurance funds (9%)  Govt. social insurance funds (4%)

26. www.bea.gov Real Compensation & Wages per Worker, United States, 2000=1.0

27. www.bea.gov Real Compensation & Wages per Worker, Mississippi, 2000=1.0

28. www.bea.gov Proprietors’ income  9.2% of personal income (farm 0.4%, nonfarm 8.8%)  Farm:  Based on US Department of Agriculture data  Nonfarm:  Based on tabulations of IRS tax returns— Schedule C & partnership Form 1065  Adjusted for misreported income

29. www.bea.gov Contributions for Govt. Social Insurance  8% of personal income  This is a deduction in the derivation of personal income  Mostly contributions for Social Security & Medicare  Contributions from Employers, Employees, & the Self-Employed

30. www.bea.gov Adjustment for Residence  Place of work compensation and earnings  Shows location of production  Used as proxy for current production  Place of residence income  Indicator of economic well-being  Shows where income is available for tax planning and for spending analyses

31. www.bea.gov Adjustment for Residence  <0.5% of personal income nationally  Mississippi: 2.9%  Hinds, Ms-21.3%  Harrison, Ms-11.8%  Jackson, Ms 4.7%  Rankin, Ms 16.4%  Louisiana -0.1%  Orleans, La-65.0%  St. Tammany, La 40.0%  Inter-county commuters  Based on Census Journey to Work data & updated with IRS wages (place of residence)

32. www.bea.gov Dividends, Interest, & Rent  16% of personal income  Nearly 1/2 of interest is received by pension funds and life insurance carriers on behalf of persons  Local estimates based on tabulations of income tax returns and Census housing statistics

33. www.bea.gov Personal Current Transfer Receipts  15% of personal income  Social Security accounts for 1/3  Includes in-kind transfers such as Medicare & Medicaid—45% of transfers  Income maintenance, unemployment benefits, veterans’ benefits, etc.  Based on primary data tabulated by state or county

34. www.bea.gov Future Improvements: Personal Income  Accelerate the release of county estimates of personal income  10 months after end of year  FY 2008 budget initiative to investigate the feasibility of producing this

35. www.bea.gov Future Improvements: GDP Metro  Gross domestic product for metropolitan areas  Prototype estimates released in 2007  FY 2008 budget initiative to make this permanent

36. www.bea.gov And Finally: Comprehensive Revision  Spring 2010—every 5 years  Definitional revisions  Statistical and methodological revisions  Presentational revisions

37. www.bea.gov Contact Information Robert L. Brown Chief, Regional Economic Measurement Division 202-606-9246 robert.brown@bea.gov