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Quarterly Census of Employment and Wages

Quarterly Census of Employment and Wages (QCEW) Imputation Methodology

Imputation as used by the QCEW program

Although BLS receives QCEW files from all 53 entities in a timely manner, the files contain estimates for missing respondents. Therefore, one step in the data process is to count the number of missing respondents (i.e., unit nonresponse) and of the number of missing data elements (i.e., item nonresponse). As shown in table 2 of the “Design” section of the QCEW Handbook of Methods, as of December 2016 about 3.3 percent of establishments failed to respond to the QCEW in a timely manner and thus required imputation; the corresponding percentage for employment in that same month and year was about 2 percent, as shown in table 3 of the “Design” section. The nonresponse rate for wages was about 2.8 percent in the fourth quarter, 2016, as shown in table 4 of the “Design” section.

QCEW imputation methods changed, effective with the November 2020 QCEW news release, containing QCEW data and information for the 2nd quarter of 2020. This page describes the old and new methods.  The new method is used for data for 2020. Data prior to 2020 were not revised to incorporate the new method.

Imputation method used prior to the November 2020 QCEW news release

The old method of imputation estimated the current month's employment or current quarterly wages by applying the change from a year earlier to the previous month's reported employment and/or quarterly wages. That is, the current month’s employment for a missing establishment is equal to the previous month’s employment multiplied by the ratio of its over-the-month change from a year earlier; a similar procedure is applied to estimate total quarterly wages. A drawback to this procedure is that it uses the data from a year earlier, which may not reflect current economic conditions.

Records are imputed for two quarters of nonresponse. After two quarters of nonresponse, BLS drops the establishment from the universe. QCEW state staff attempt to contact large missing employers in the first quarter of nonresponse.

New imputation method effective with November 2020 QCEW news release

The economic situation in 2020, which reflects the impact of COVID-19, may not have been optimally captured with the old QCEW imputation method. In 2020, BLS explored three imputation improvements. These improvements were accepted for production.  They were first used for the second published version of data for the first quarter of 2020 and for all versions of QCEW data beginning with the first published data for the second quarter of 2020.

The first improvement is a version of the ratio method of imputation described below.

BLS has conducted extensive research on alternative imputation methods for both employment and wages. The findings of the research indicate that current trends reported by similar businesses should be applied to nonrespondents. BLS defines the procedure for doing so as the ratio method. According to this method, the ratio for a particular estimation cell is computed as the sum of a current month’s reported employment (from similar businesses) divided by the sum of the previous month’s reported employment. To impute the current month’s employment for a nonrespondent, the ratio is then multiplied by the nonrespondent’s previous month’s employment. A similar procedure is applied to impute total quarterly wages.

The second improvement immediately identifies missing employers that are likely to have ceased operations. This will eliminate imputation for many establishments that are out of business. This improvement will use counts of claims for unemployment benefits, aggregated by employer, to mechanically identify businesses that are likely to have ceased operations.

The third improvement is the use of benefit claims counts by state QCEW staff as a supplement to existing manual data review. Tables presenting the impact of the ratio method and the new identification of out-of-business establishments are available from the 2020 2nd quarter QCEW Improved Imputation Methodology Impact worksheet.

QCEW Imputation Issue Caused by Pandemic-Related Challenges

In the spring of 2020, BLS modified its imputation process for QCEW to be more responsive to current economic conditions. While continuing work to improve this process, BLS made an unintended data processing error. This error affected data for the second, third, and fourth quarters of 2020. BLS has analyzed this issue and has determined that the impact on QCEW employment was negligible at the statewide level. In smaller areas and industries, revisions may be larger than usual. Wage data were not affected. Following the usual QCEW practice, these data will be revised and corrected with the full data update on September 1, 2021.

Last Modified Date: May 18, 2021