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Understanding Business Dynamics: An Integrated Data System for America’s Future
as “nonemployers” and are often treated separately in Census Bureau data collection programs.
The Census Bureau also allows a physical location to be disaggregated into multiple establishments if there are distinct lines of operation producing different goods (typically goods that are in different industries) at the same location. This disaggregation of a physical location is done only for cases in which the activity in at least two production lines falls into different industry sectors and output can be allocated accordingly. This typically involves large vertically integrated production locations. However, this disaggregation of physical locations complicates the picture because a small, integrated physical entity may be treated simply as one establishment while a large integrated one (doing essentially the same things) may be treated as multiple establishments.
BLS employs a similar establishment concept in the Quarterly Census of Employment and Wages (QCEW) program used to support its business register. Although there are some differences in industry coverage across the Census Bureau and BLS programs, the notion of an establishment is quite similar. One definitional difference that does exist between the agencies has to do with the treatment of very small multiunit operations. While the Census Bureau makes no distinction for reporting based on the size of small multiunit establishments, the QCEW allows small multilocation employers (10 or fewer employees in secondary work sites within the state) to file a combined report as a single establishment.
An alternative unit of analysis, used less frequently than the establishment concept, is the line of business. The line of business typically lies between the company level and the establishment and is organized around production in a sector or industry. The Federal Trade Commission line-of-business data program (discontinued) required companies to disaggregate their financial data in this way. In some Census Bureau surveys, large firms are asked to report for a particular line of business. A statistical reporting unit based on line of business may represent the activity (and even partial activity) of a number of individual establishments. Alternatively, a firm may be directly surveyed about economic activity for an industry or collection of industries that, again, may span a set of individual establishments owned by the firm. For example, the Annual Capital Expenditures Survey of the Census Bureau surveys firms regarding capital expenditures, but it requires firms to break out the expenditures by industry.
2.2 DEFINING BUSINESS UNITS FOR THEPURPOSE OF MEASURING DYNAMICS
The key challenges for a data system intended to have the capacity to measure producer dynamics involve accurately tracking (1) the entry,