The Statistics Corner: Research with Economic Microdata: The Census Bureau's Center for Economic Studies

Article excerpt

In a typical year, the Census Bureau's Economic Programs area carries out scores of surveys or censuses of business establishments and firms. These surveys produce a myriad of "data products" (as the Census Bureau calls them), most of which consist of aggregated sums and cross tabulations, across various economic sectors (industries, states, size classes, etc.). The vast majority of the readers of this journal use one or more of these data products directly or indirectly (for example, through the National Income and Product Accounts or the Merchandise Trade Statistics).(1)

While most readers are familiar with Census Bureau data products, they may not be familiar with the Center for Economic Studies (CES), a part of the Economic Programs area. Most of the work of CES consists of analytical studies carried out by CES staff and by "research associates" (as they are called) from government, academia, and other research groups. Until now, CES work products have usually appeared in academic journals, not in Census Bureau publications.

CES conducts no surveys of its own. Instead, it links survey microdata over time to form longitudinal panels (called longitudinal micropanel databases), and it broadens these panels by linking them with other data sets from both within and outside the Census Bureau.

Table 1 describes most of the databases at CES. The primary database is the Longitudinal Research Database (LRD), which consists of annual cost and output data on manufacturing establishments (plants) from the Census of Manufactures (1963, 1967, 1972, 1977, 1982, and 1987) and from the Annual Survey of Manufactures (since 1972), linked to form an unbalanced longitudinal panel.(2) Among many microdata sets CES has linked to the LRD are the National Science Foundation/Census Research and Development (R&D) survey and the Pollution Abatement Costs and Expenditures (PACE) survey. These enriched data sets provide researchers with new tools to test hypotheses and examine policy options.

The CES research program is broad, reflecting the diversity of Census Bureau data programs and the needs of researchers and policy makers. In this paper, we can only give examples that suggest the scope of the research. Recent studies find that:

1. Recessions are times in which job destruction rises TABULAR DATA OMITTED sharply but job creation falls only slightly. Similarly, expansions are better characterized as reductions in job destruction than as increases in job creation. Variations in job destruction rates, therefore, appear to be the crucial difference between recessions and expansions, at least for the U.S. manufacturing sector in 1972-88 (Davis and Haltiwanger 1990).

2. The conventional view of recessions -- that jobs disappear temporarily while the creation of new jobs declines, and that most of the workers are recalled when aggregate demand recovers -- appears incorrect. Most jobs created are created permanently and most jobs lost are lost permanently (Davis and Haltiwanger 1992).

3. During the 1980s, the rise in total factor productivity in manufacturing industries resulted from increases in the market share of the most productive existing plants. Exit of plants with low productivity and entry of plants with high productivity played almost no role in the rise in productivity (Baily, Hulten and Campbell 1992).

4. Most large manufacturing plants use advanced technology, and those using the most advanced technology pay the highest average production worker wages. Moreover, the adoption of advanced technology has an effect on wages that operates separately from the relationship between plant size and wages (Dunne and Schmitz 1992).

5. Secondary products of plants producing the same primary products bear little relationship to one another unless they are produced by plants under common ownership (Streitwieser 1991).

6. Ownership changes tend to be associated with improvements in the productivity of surviving plants (Lichtenberg and Siegel 1992). …