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Understanding Business Dynamics: An Integrated Data System for America’s Future
base (ILBD) and Longitudinal Employer-Household Dynamics programs at the Census Bureau and BLS’s Business Employment Dynamics.
A.2.1 ILBD and Precursors
The ILBD has evolved as a natural extension of the Longitudinal Business Database (LBD), which the Census Bureau’s Center for Economic Studies began constructing in 1999. The LBD covers employer establishments, currently for the period 1975-2003. These programs, which can be traced to the early 1990s (under various names), have expanded research capabilities to new frontiers that would not have been possible with aggregate and cross-sectional data alone.
The LBD was constructed using EINs to link year-to-year snapshots of all employer establishments, along with name and location information contained in the Census Bureau’s SSEL. Work is ongoing to add such fields as payroll employment, location, industrial activity, and firm affiliation. The LBD is useful for researching elements of business dynamics, such as firm entry and exit and job flows. Establishment identifiers also facilitate linking the LBD to other data sets. The value of the data set is enhanced by its algorithm for flagging establishment records as births, deaths, or continuers. Generally speaking, a birth is identified when a record appears for the current year that does not match any record from the previous year; a death is detected when a record for a previous year does not match any record for the current year; and continuing establishments show a match from one year to the next (see Jarmin and Miranda, 2002, for a detailed explanation of this algorithm). The practice of using EINs in conjunction with name and address information is intended to increase the accuracy with which establishment births and deaths can be identified; missing source data for some years make this a challenge.
The LBD itself is an extension of another CES predecessor, the Longitudinal Research Database (LRD), which contains longitudinally linked plant-level data from censuses and annual surveys of manufactures. With the relatively rapid growth and subsequent interest in nonmanufacturing sectors, the narrow focus of the LRD has become an increasing concern. Furthermore, LRD coverage of firms with fewer than 250 employees is limited, and the plant-level data are not linked to enterprises, so the overall size and industry of enterprises owning large plants are not always known. Despite these limitations, the LRD has been intensely analyzed and has spawned a robust literature (see Bartelsman and Doms, 2000, for a review of these efforts). The LBD allowed academic research on employment dynamics issues at the establishment level (forged by Dunne, Roberts, and Samuelson, 1989; Davis and Haltiwanger, 1990, 1992; and Davis,