Comparison of IMPLAN Source Data for Employment and Labor Income

Overview

We often receive questions about our source data for Employment and Labor Income. These questions typically arise when comparisons are made between IMPLAN Employment estimates and public employment data provided by government agencies. This document describes important differences among the datasets and provides some illustrative comparisons. The most important three datasets IMPLAN relies on for our Employment and Labor Income estimates are:

• Bureau of Labor Statistics (BLS) Census of Employment and Wages (CEW)
• Census Bureau County Business Patterns (CBP)
• Bureau of Economic Analysis (BEA) Regional Economic Accounts (REA) data

Differences across the datasets are attributable to several factors:

• Different coverage of industries – e.g., one may cover farms and another may not.
• Different level of detail reported – e.g., 3-digit versus 6-digit NAICS.
• Different types of employment included – e.g., wage and salary employment only, versus wage and salary employment plus proprietor employment.
• Differences in dataset release timing – e.g., the lag between dataset reference years and publication years may differ.
• Different data collection methods – e.g., using IRS data to identify businesses vs. participation in unemployment insurance (UI) programs, and surveying businesses once per year versus multiple times per year.
• Different classification of the same business establishment – e.g., one dataset might consider a business establishment as a producer of boats (NAICS 336612, IMPLAN sector 364) and another might consider that same business establishment as a producer of ships (NAICS 336611, IMPLAN sector 363); for an illustration, see this article: "Inconsistencies Between County Business Patterns & Bureau of Labor Statistics Coverage"

The different agencies that produce these datasets provide their own descriptions of coverage and methods, including comparisons to other datasets. Readers of this article who are interested in more-detailed information should consult these pages:

• CBP: https://www.census.gov/programs-surveys/cbp/about.html
• CEW: http://www.bls.gov/cew/cewover.htm and http://www.bls.gov/news.release/cewqtr.tn.htm
• BEA REA: http://www.bea.gov/regional/methods.cfm

Comparison Table

IMPLAN's Use of the Data

IMPLAN estimates employment and income for both wage and salary employees and proprietors for all IMPLAN industries at the county level. Accordingly, it uses information from all of these datasets, as well as other supplementary sources where available.

IMPLAN uses CEW establishment counts by industry by county, which are always disclosed, as the ultimate control for classification by industry and whether a county has wage and salary employment in a particular industry. IMPLAN uses CEW estimates of wage and salary compensation and employment, where disclosed, as the wage and salary employment total in the IMPLAN data. CEW data is supplemented with CBP data where CEW are not disclosed, if possible. IMPLAN uses REA data to supplement CEW data where CEW lack complete coverage of an industry. IMPLAN also uses REA data to estimate proprietor employment and income.

[1]Noise infusion is a method of disclosure avoidance in which values for each establishment are perturbed prior to table creation by applying a random noise multiplier to the magnitude data (i.e., characteristics such as first-quarter payroll, annual payroll, and number of employees) for each company. Disclosure protection is accomplished in a manner that results in a relatively small change in the vast majority of cell values. Each published cell value has an associated noise flag, indicating the relative amount of distortion in the cell value resulting from the perturbation of the data for the contributors to the cell. The flag for ‘low noise’ (G) indicates the cell value was changed by less than 2 percent with the application of noise, and the flag for ‘moderate noise’ (H) indicates the value was changed by 2 percent or more but less than 5 percent. Cells that have been changed by 5 percent or more are suppressed from the published tables. Additionally, other cells in the table may be suppressed for additional protection from disclosure or because the quality of the data does not meet publication standards. Though some of these suppressed cells may be derived by subtraction, the results are not official and may differ substantially from the true estimate. See https://www.census.gov/programs-surveys/cbp/technical-documentation/methodology.html for more information.