BOX 4-1

Alternative Models: Building Registers Primarily from Administrative Data

Upon systematic review (see Appendix A), it is striking how many good business surveys are conducted in the United States. The problem is that in only a few cases can information be merged across sources. This makes it expensive to collect the data and also creates a substantial burden for respondents.

In contrast, some European countries now collect their census data on persons and businesses via a number of administrative registers. In these systems, individuals have identification numbers assigned at birth or, for persons not born in the country, when they are granted a work permit for the first time. This is similar to the U.S. Social Security numbering system. The register of identification numbers is kept up to date through several sources, again depending on the country. In most of Scandinavia, a housing register provides the core structure of the person registers, as all inhabitants are allocated to an address and to a particular house or apartment. Whenever people change addresses, they must inform the agency in charge of the housing register. All births are recorded in the birth register; there are other kinds of registers—e.g., tax, education, health, criminal—as well. In Denmark, administrative registers must be authorized by Parliament and statistical registers by Statistics Denmark; the conditions for data use have to be codified in the act allowing the collection of data.

Similarly, each business has an ID (similar to the employer identification number or EIN in the U.S. system) which also serves as the value-added tax (VAT) number. This number is given to a firm at the time of registration; all agencies collecting data use the same ID numbers, with the result that the register is constantly kept up to date with basic information on all citizens and business entities. Registering a business is required if it is incorporated; the business also needs a number in order to collect and deduct VAT, or if the owner wants his income to be taxed as a business. Since business tax is lower than personal income tax, owners have a clear incentive to register at an early stage. If the business has employees, it must register in order to collect taxes from them. All these registrations are coordinated through one single business ID number. Furthermore, each geographical workplace (establishment) has a register number that is linked to the business ID number.

Information on businesses and citizens is updated every time they have to report payment or withholding for persons. Every January, businesses must regis-

and privately held businesses; three are maintained by government agencies—the Internal Revenue Service (IRS), BLS, and the Census Bureau—and one is a private database produced by Dun & Bradstreet. The business registers at the Census Bureau and BLS are the primary sources from which business statistics on firm and establishment dynamics are generated. The main programs on business dynamics in the United States—Business Employment Dynamics (BED) and the Statistics of U.S. Businesses (SUSB) and related Longitudinal Business Data (LBD)—are constructed from the microdata on establishments in these files.

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