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.
The current method of imputation estimates 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.
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 current economic situation, which reflects the impact of COVID-19, may not be optimally captured with the current QCEW imputation procedures. Therefore, BLS is exploring three different potential imputation improvements. These improvements will affect the second published version of data for the first quarter of 2020, and will also be used for all versions of QCEW data beginning with the first published data for the second quarter of 2020.
The first possible improvement is a version of the ratio method of imputation described above.
The second possible improvement will immediately identify 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 possible improvement is the use of benefit claims counts by state QCEW staff as a supplement to existing manual data review.
BLS will report on the status of these improvements prior to or with the publication of data for second quarter, which is scheduled for November 18, 2020.
Last updated on 8/18/20