Business Employment Dynamics: Concepts
Business Employment Dynamics (BED) is a set of quarterly and annual data on gross job flows. The BED dataset provides a measure of the dynamic state of the labor market. The BED program publishes national North American Industry Classification System (NAICS) sub sector data, national firm-size data, state industry NAICS sector data, national industry NAICS sector data on establishment age and survival, and state data on establishment age and survival, as well as data on the size of employment change in establishments.
Whereas a firm would represent an entire business, an establishment affords data that offer a more granular look at the labor market. Establishments represent smaller elements that are based on location and/or primary economic activity. BED data are produced with the use of establishment-level microdata from the BLS longitudinally linked database containing employment and wage data collected by the QCEW program. A unique identifier assigned to each record allows tracking of each business across time despite changes in name or ownership. These longitudinal histories are then used to calculate BED statistics such as gross job gains and losses and business births and deaths. Gross job gains are jobs gained from establishment expansions plus openings. Gross job losses are jobs lost from establishment contractions plus closings. All BED data are available on the BLS website (https://www.bls.gov/bdm/); the most recent data can be found in the BED press release (https://www.bls.gov/news.release/pdf/cewbd.pdf).
Openings. These are establishments either with positive third-month employment for the first time in the current quarter, with no links to the previous quarter, or with positive third-month employment in the current quarter following zero employment in the previous quarter.
Expansions. These are establishments with positive employment in the third month in both the previous and current quarters, with a net increase in employment over this period.
Gross job gains. This is the sum of all jobs from opening and expanding establishments.
Closings. These are establishments with positive third-month employment in the previous quarter and with either zero third-month employment reported in the current quarter or an inactive status in the current quarter.
Contractions. These are establishments with positive employment in the third month in both the previous and current quarters, with a net decrease in employment over this period.
Gross job losses. This is the sum of all jobs from closing and contracting establishments.
Births. These are establishments with positive third-month employment for the first time in the current quarter and with no links to the previous quarter, or units with positive third-month employment in the current quarter and zero employment in the third month of the previous four quarters. Births are a subset of openings and do not include reopenings of seasonal businesses.
Deaths. These are establishments with no employment or zero employment reported in the third month of four consecutive quarters following the last quarter with positive employment. Deaths are a subset of closings and do not include temporary shutdowns of seasonal businesses. An establishment that closes during the quarter may be a death, but the BED program waits three quarters to determine whether the closing is permanent or is just a temporary shutdown. Therefore, there is a lag of three quarters between a permanent closing and its publication as an establishment death.
All employment changes are measured from the third month of the previous quarter to the third month of the current quarter. Not all establishments and firms change their employment levels. Establishments with no change in employment count toward estimates of total employment, but not for levels of gross job gains and gross job losses.
Industry Classification of Establishments
All federal statistical agencies currently use the North American Industry Classification System (NAICS) to define industries and classify establishments. NAICS revises its industry classifications every 5 years, to stay current with industrial organization in North America.
Last Modified Date: December 24, 2015