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Quarterly Workforce Indicators: Case Studies and Examples

Quarterly Workforce Indicators: Case Studies and Examples. C2ER Training Workshop June 4, 2012 Erika McEntarfer LEHD Program US Census Bureau. In this section:. Apply knowledge about basic employment and wage concepts in QWI to specific questions you may encounter in your work

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Quarterly Workforce Indicators: Case Studies and Examples

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  1. Quarterly Workforce Indicators:Case Studies and Examples C2ER Training Workshop June 4, 2012 Erika McEntarfer LEHD Program US Census Bureau

  2. In this section: • Apply knowledge about basic employment and wage concepts in QWI to specific questions you may encounter in your work • Specifically: • Smoothing seasonal data • Calculating rates • Producing custom aggregates

  3. Smoothing seasonal indicators Hiring in California, 1993-2011: Not Seasonally Adjusted • QWI currently doesn’t generate a seasonally adjusted series. • Hard to see cyclical trends with all the seasonality. Source: Quarterly Workforce Indicators, US Census Bureau

  4. Seasonal adjustment: Options • Annualize the data • Easier for some indicators than others • Take rolling averages • Easy, but crude (available in QWI online) • Do your own seasonal adjustment • Best option • X12 (SAS, others) • Excel seasonal adjustment module

  5. Smoothing seasonal indicators Hiring in California, 1993-2011: Seasonally Adjusted • This series is adjusted using X12 in SAS. • Much easier now to see cyclical trends and graphs look much cleaner. Source: Quarterly Workforce Indicators, US Census Bureau

  6. Constructing rates • Separations, Accessions, Job Creation, etc. all very useful statistics, • but often more meaningful expressed as rates • Because there are several types of hires, separations, and employment indictors, it’s not always clear how to construct simple rates.

  7. Constructing an accession rate • Hires: several options • Hires • New Hires • Recalls • Stable Hires • Employment: several options • Beginning of Quarter Employment • End of Quarter Employment • Flow Employment • Stable Employment

  8. Constructing an accession rate Hiring and Employment in CA, Seasonally Adjusted Accessions (A): -- all hires in a quarter, regardless of length of employment spell Flow employment (M): -- all persons who had positive wages during the quarter, typically much larger than point in time employment estimates B & E employment: -- point in time estimates of employment at start and end of quarter. Accessions, particularly in small, high turnover firms, can exceed point in time employment -- so A/(B+E)*1/2 can be greater than 100% -- A/M is bounded by 100%

  9. Constructing a separation rate • What is true for accessions is also true for separations • While either choice is valid, using flow employment does benchmark better to other series such as JOLTS. Recommended Source: Authors calculations from the Quarterly Workforce Indicators, US Census Bureau

  10. Hiring vs. Job Creation • Often, we are interested in both hiring, job creation, and net job flows: • Hires: growth hires and replacement hires • Job Creation: growth hires only • Net job flows: Job Creation – Job Destruction, or net employment change

  11. Hiring vs. Job Creation Hiring and Expansionary Hiring in California, 1993-2011: Seasonally Adjusted Note: All Hires are more cyclical than expansionary hiring – employment churn is procyclical Can calculate the share of all hires that are replacement hires (A/JC). Note replacement hiring falls much more steeply in the Great Recession -- workers either not separating from jobs -- or employers leaving vacancies unfilled Source: Authors calculations from the Quarterly Workforce Indicators, US Census Bureau

  12. Exercise 1: Examine Hiring Patterns in California (10 minutes) • Calculate hires as a share of employment • Use both flow employment and average employment, why are they different? • Calculate the share of hires in CA that are expansionary

  13. Exercise 1: Job hiring rate in California, 1993-2011: Seasonally Adjusted

  14. Exercise 1: Share of Hires in California that are Expansions in Firm Employment, 1993-2011: Seasonally Adjusted

  15. Exercise 2: Comparing Separation Rates Within a sector (10 minutes) • Health Care is often thought of as a high turnover sector, but there’s quite a bit of heterogeneity in turnover within health care • Calculate worker separation rates using your preferred measure for: • Ambulatory Health Care (Physicians offices, clinics) • Hospitals • Nursing Facilities

  16. Exercise 2: Comparing Separation Rates Within a sector

  17. Creating custom aggregations • QWI are available by: • Worker age, education, gender, race • Detailed Industry • Detailed Geography • But often want to create custom aggregations of available categories • Older workers • Industry Clusters • Etc.

  18. Be careful when aggregating • Employment and net job flows fairly straight-forward • Simply aggregate them across categories • However: • Because of noise infusion and suppressions, be cautious when aggregating small cells • Always use tabulated aggregation if available • Earnings and nonemployment more complicated • Should compute weighted averages using the appropriate employment number (stable for stable wages, etc)

  19. Job Creation and Destruction:Most Common Aggregation Error • Note that for categories like age and sex, the published net job flows for the subcategories will sum to the margin • But for gross Job Creation and gross Job Destruction this is not true • (Job Creation for men) + (Job Creation for women) does not equal (total Job Creation) • For example, a job could be created at a firm and filled by a woman, while another job at the same firm is destroyed, previously filled by a man

  20. Exercise 3: Younger Workers (10 minutes) • Graph the share of workers under 25 in California over the time series. • Calculate and graph growth trends in average nominal earnings for workers under 25 in California, relative to those for all workers in California.

  21. Exercise 3: Younger Workers Workers under 25 as a share of the California workforce, 1993-2011: Not Seasonally Adjusted Great Recession impacted share of young workers in market quite severely, is at almost 20 year low.

  22. Exercise 3: Younger Workers Growth Average Nominal Monthly Wages, Workers < 25, California workforce, 1993-2011: Not Seasonally Adjusted (1993:1=1) Around 2007, wage growth for young workers stalls out, even falls

  23. To sum up • While many QWI indicators can be used as is, frequently they require manipulation to produce the information needed • These exercises show how to: • Handle seasonality • Construct rates • Create custom aggregates

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