Experimental JOLTS Estimates by Establishment Size Class

The Bureau of Labor Statistics is currently pursuing research on job openings, hires, and separations by establishment size. These estimates, though experimental at present, may help to better explain some of the internal dynamics of the labor market. This experimental series begins in December 2000 (also the starting point of the official Job Openings and Labor Turnover Survey series) and ends in February 2012. The available files provide users with tables and charts of job openings, hires, and total separations, as well as three breakouts of total separations: quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations. (See the JOLTS technical note at http://www.bls.gov/news.release/jolts.tn.htm for more detailed descriptions of JOLTS data elements.) Users should be aware that these estimates were developed as a result of an intermittent research project. They may be updated periodically, as resources permit. They are not an official BLS published series.

Additional research performed on these experimental estimates since their initial release suggests that hires and separations in the lowest size class may be somewhat understated in the present series. Any underestimate of hires and separations in this size class, however, is made up for by slight overstatements in the higher size classes. This effect appears to be traceable to the current benchmarking process which is not performed on each individual size class. Ongoing BLS research into the development of employment benchmarks by size class should more accurately distribute JOLTS data elements across size classes.

If you are interested in receiving a copy of these experimental size-class estimates, please email joltsinfo@bls.gov.

Sampling and Estimation Procedures

The production of these experimental size class estimates for Job Openings and Labor Turnover Survey (JOLTS) data follow standard statistical survey sampling and estimation procedures. (See the JOLTS technical note at http://www.bls.gov/news.release/jolts.tn.htm for a more detailed discussion of JOLTS techniques.) These sampling and estimation procedures are explained below.

Sample design–The survey design is a random sample of 16,000 nonfarm business establishments, including factories, offices, and stores, as well as federal, state, and local governments in the 50 states and the District of Columbia. The establishments are drawn from a universe of over 9.1 million establishments compiled as part of the operations of the Quarterly Census of Employment and Wages (QCEW) program. The QCEW program includes all employers subject to state Unemployment Insurance (UI) laws and federal agencies subject to Unemployment Compensation for Federal Employees (UCFE). The scope for these JOLTS size class estimates is limited to establishments in the private sector.

Stratification–The sampling frame is stratified by ownership, region, industry sector, and size class. The JOLTS sample is constructed from individual panels of sample units drawn on an annual basis. The full annual sample consists of one certainty panel, composed of only large units selected with virtual certainty based on their size, and 24 non-certainty panels. Each month a new non-certainty panel is rolled into collection, and the oldest non-certainty panel is rolled out. This means that at any given time the JOLTS sample is constructed from panels from up to three different annual sampling frames. Beginning with April 2009, the entire sample of old plus new panels is post-stratified and re-weighted annually to represent the most recent sampling frame. Additionally, out-of-business establishments are removed from the old panels. Also since mid-2009, the annual sample is supplemented with a quarterly sample of business birth establishments (i.e., new establishments) to better reflect the impact of younger establishments in the JOLTS sample. NOTE: The sampling weights are assigned at the ownership/region/industry/size class level.

Definition of size class–The maximum employment of the establishment over the last 12 months is used to determine size class at the time of sample selection; this classification stays fixed for a year until the next annual sample is drawn.

Size	Employees
1	1-9
2	10-49
3	50-249
4	250-999
5	1000-4999
6	5000+

Data collection–The same data that are collected and used to produce published industry and regional estimates are used for size class estimates. For this research project, the data were scrutinized for outliers with respect to industry and regional estimates but not for size class estimates.

Aggregated reports–Some sample units provide data at an aggregated level. That is, the respondent provides a consolidated data report. The data for these reports are re-weighted accordingly. The same data used for published estimates by industry and region were also used for these size class estimates.

Adjustment for missing data–If there are not sufficient usable units in a particular region/industry/size class cell, then data are collapsed across size classes to perform non-response adjustment for missing units. Similarly for item non-response, donors are borrowed across size class for imputing missing data.

Calibration–The weighted sample based employment estimates are ratio adjusted, or benchmarked, to independent population controls derived from the Bureau’s Current Employment Statistics (CES) survey, also known as the payroll survey, which are more reliable due to a much larger sample size. At present, the benchmark factors are calculated at the region/industry level and are applied accordingly to all the JOLTS data items; they are not calculated at the size class level.

Estimation of levels–The derivation of basic estimates for each respondent is the product of four numbers: sampling weight; non-response adjustment factor; calibration or benchmark factor; and the characteristic (e.g., number of job openings). This product is then summed over all the respondents belonging to each size class.

Birth/Death model component–The primary purpose of this segment of the estimation process is to account for contributions from new businesses that cannot be captured by the survey because they are not yet present on the sample frame. It also adjusts for effects of business deaths that may not be captured by the sample as many businesses do not respond to the survey in the month they close. These estimates are applied at the industry/size class level. At the total private level, the size class estimates of total hires and separations equal those derived from the region/industry level. The sum of the size class estimates of job openings; quits; layoffs and discharges; and other separations, however, differ slightly from those of region/industry as these estimates are based on the distribution of each estimation cell. These estimates are added to the basic estimates for each size class.

Alignment procedure–JOLTS hires minus separations should be comparable to the CES net employment change. However, definitional differences between the two surveys as well as sampling and non-sampling error historically caused JOLTS to diverge from CES over time. To limit the divergence and to improve the quality of the JOLTS hires and separations series, BLS implemented the Monthly Alignment Method. For size class estimates, this procedure is applied at the total private level such that not seasonally adjusted size class estimates are proportionately aligned to the total private not seasonally adjusted industry estimates. This procedure is independently applied to each characteristic—job openings; hires; total separations; quits; layoffs and discharges; and other separations. NOTE: Because of independent alignment, the sum of quits; layoffs and discharges; and other separations may not exactly equal to the total separations for not seasonally adjusted estimates.

Seasonal Adjustment–BLS seasonally adjusted this research size class series using the X-12-ARIMA seasonal adjustment method. Seasonal adjustment is the process of estimating and removing periodic fluctuations caused by events such as weather, holidays, and the beginning and ending of the school year. Seasonal adjustment makes it easier to observe fundamental changes in the level of the series, particularly those associated with general economic expansions and contractions. A concurrent seasonal adjustment methodology is used in which new seasonal adjustment factors are calculated each month, using all relevant data, up to and including the data for the current month. The six characteristics (job openings; hires; total separations; quits; layoffs and discharges; and other separations) and employment for each size class were independently adjusted.

Estimation of Rates–The job openings rate is computed by dividing the job openings level by employment plus job openings, and multiplying this quotient by 100. The hires rate is computed by dividing the hires level by employment, and then multiplying the result by 100. The remaining rates (total separations, quits, layoffs & discharges, and other separations) are computed in the same manner as the hires rate. The employment by size class estimates used in the derivation of the rates were developed only for this purpose and are not an official BLS series.

Reliability of the Estimates

JOLTS estimates are subject to both sampling and non-sampling error as are all sample surveys. When a sample rather than the entire population is surveyed, there is a chance that the sample estimates may differ from the "true" population values they represent. The exact difference, or sampling error, varies depending on the particular sample selected. This variability is measured by the standard error of the estimate. As the size class estimates series is a newly developed research series, variance estimates have not yet been developed. This work is in progress.

The JOLTS estimates also are affected by non-sampling error. Non-sampling error can occur for many reasons, including the failure to include a segment of the population, the inability to obtain data from all units in the sample, the inability or unwillingness of respondents to provide data on a timely basis, mistakes made by respondents, errors made in the collection or processing of the data, and errors from the employment benchmark data used in estimation.

Limitations on using the JOLTS size class estimates–Users of these research estimates should be aware of the following:

1. These estimates are based on size of establishment, not size of firm. For some types of economic analysis, firm size data may be more appropriate. The JOLTS sample design does not support estimates by size of firm.
2. JOLTS industry estimates are reviewed individually for atypical movements. These movements are examined more closely to ensure they are caused by legitimate economic activity and not by errors in reporting. Users of these experimental size class estimates should be aware that these estimates were not examined for atypical movements by size class.
3. A number of the procedures applied to these estimates were not controlled for additivity. Specifically, the sum of the separations breakouts does not always add to total separations due to independent seasonal adjustment.
4. These experimental JOLTS size class estimates were aligned to reflect over-the-month employment change in a manner different from that applied to the published industry estimates.
5. In the larger size classes the JOLTS survey response is much lower than in the other size classes, leaving the process much more vulnerable to non-response issues.
6. Users should keep in mind that these estimates are the product of periodic research into size class data. They may be updated on an infrequent basis, as resources permit. These estimates are not an official BLS published series.

Technical Information

For more information, please send e-mail or call (202) 691-5870.

 

Last Modified Date: April 30, 2012