Proprietor income and employee compensation question

Does the estimate of a sector's Proprietor Income include investment and royalty income? Likewise, does the estimate of a sector's Employee Compensation include compensation for passive investors, royalty recipients, limited partners, or corporate partners? I am specifically interested in sectors 20 and 21. 

Thank you for your help!

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  • Hi,

    Great question! No, compensation for passive investors, royalty recipients, limited partners, or corporate partners is not include in a Sector's Employee Compensation. Nor does a sector's Proprietor Income include investment and royalty income.

    Compensation for partners would instead be included in the Sector's Proprietor Income. Dividends and royalties are included in the Sector's Other Property Income.

    Employee Compensation includes just the total cost of the employee to the employer. 

    Thank you,

    IMPLAN Staff

    1
  • Thank you! Does compensation for partners in Proprietor Income include only active partner compensation? Or does this include passive partner compensation as well? 

    0
  • Hello,

    Of course - happy to help! Another great question. This one was a little harder, so I looped in the data team to produce the following answer:

    The answer appears to be yes, they are included.  I've looked at a couple sources of BEA documentation and don't see any exclusions other than the section I've bolded in this definition of employment from the BEA:

    Employment
    BEA gives equal weight to full-time and part time jobs in its estimates of employment. Wage and salary jobs and proprietors’ jobs are counted, but unpaid family workers and volunteers are not. Proprietors’ employment consists of the number of sole proprietorships and the number of general partners. Wage and salary employment is on a place of work basis. Proprietors’ employment, however, is more nearly by place of residence because, for nonfarm sole proprietorships, the estimates are based on IRS tax data that reflect the addresses from which the proprietors’ individual tax returns are filed, which are usually the proprietors’ residences. Nonfarm partnership employment reflects the tax-filing address of the partnership, which may be either the residence of one of the partners or the business address of the partnership. Farm proprietors’ employment is a count of operators of non-corporate sole proprietorship and partnership farms estimated from U.S. Department of Agriculture data. The residence and place of work of farm proprietors’ employment is assumed to be the same—the county in which most of farmland is located.  The employment estimates are designed to be consistent with the estimates of wage and salary disbursements, proprietors’ income, and earnings. The employment estimates are based on the same sets of source data as the corresponding earnings estimates and are prepared with parallel methodologies. However, two components of proprietors’ income—the income of limited partnerships and the income of tax-exempt cooperatives—have no corresponding employment estimates.

    Thank you,

    IMPLAN Staff

    1

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