the lowest possible cost, the statistical agencies must be able to access the best information available, system-wide. Data sharing has the potential to reduce respondent burden as well which, along with assurances of confidentiality, may increase the likelihood that businesses respond to survey requests.

To their credit, the statistical agencies have recognized the potential gains from data sharing, and survey and administrative data on U.S. businesses are shared to some extent among BEA, BLS, and the Census Bureau for statistical purposes.8 Recommendation 11, above, argues for extending CIPSEA to increase the flexibility with which information can be shared among statistical agencies for purposes of constructing a comprehensive business register and for designing special surveys. Sharing of business registers is essential in order to continue to improve the accuracy of measures of industry output, compensation, and productivity trends. It would permit the statistical agencies to keep abreast of the dynamic economy by producing statistical samples that are consistently and quickly adjusted to reflect entry and exit of new businesses. This is especially important for fast-growing and innovative industries, such as information technology. Such improvements would enhance our ability to perceive emerging trends in the economy and more accurately forecast economic activity.9

The panel endorses most aspects of the past efforts (reviewed in 4.4 Appendix) to expand data sharing. Effective coordination of statistical agency data programs is essential for improving the accuracy, coverage, and timeliness of business data, as well as the efficiency with which it is produced. As discussed above, a key part of the strategy to develop the most useful business data system possible (and a valuable and low-cost first step) would be to coordinate, and improve in other ways, the business lists residing at the Census Bureau and at BLS. Expanded interagency data sharing is a prerequisite for making progress on such a project.

Before work can progress much further to reconcile the business lists, and before data sharing between the three CIPSEA-designated agencies (BLS, BEA, and the Census Bureau) can be fully exploited, the IRS regulations and tax code legislation must be changed.

Recommendation 15: Measures should be taken immediately to facilitate the expansion of CIPSEA to increase the kinds of infor-

8

The “statistical purposes” qualifier excludes using information for administrative, regulatory, law enforcement, judicial, or other purposes that may affect the rights, privileges, or benefits of a respondent.

9

This argument was well articulated in comments made by Federal Reserve Board governor Randall S. Kroszner about “developing innovative statistics for a dynamic economy” (Kroszner, 2006).



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