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Handbook of Methods Quarterly Census of Employment and Wages Design

Quarterly Census of Employment and Wages: Design

This section is based largely on the 2021 Office of Management and Budget (OMB) clearance of the Quarterly Census of Employment and Wages (QCEW) program.

The sampling frame universe

The universe respondent sampling frame BLS uses for the QCEW program consist of the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. The data source for these 53 entities is the Quarterly Contribution Reports (QCR) submitted to State Workforce Agencies (SWAs) by employers subject to state unemployment insurance (UI) laws. The QCEW data—which are compiled for each calendar quarter—provide a comprehensive business name and address file with monthly employment and quarterly wage information by industry. The data are available at the six-digit North American Industry Classification System (NAICS), national, state, Metropolitan Statistical Area (MSA), and county levels for employers subject to state UI laws. Similar data for federal government employees covered by the Unemployment Compensation for Federal Employees program (UCFE) also are included.

The QCEW program provides a virtual census of nonagricultural employees and their wages, with about 44 percent of the workers in agriculture covered as well. As shown in table 1 in the December 2019 data release, the number of covered private business establishments (worksites) is about 9.84 million, and the number of covered employment is about 128.27 million. Additionally, about 60,000 federal government, 70,000 state government, and 170,000 local government establishments are covered. In December 2019, the total number of covered establishments is about 10.29 million, and the total number of covered employment is about 150.85 million. The QCEW series has broad economic significance in measuring labor trends and major industry developments, in time series analyses and industry comparisons, and in special studies, such as analyses of establishments, employment, and wages by size of establishment.

The BLS role in the QCEW program is to establish and enforce uniform methods and processes that yield a consistent level of data quality for the multifaceted uses of QCEW data.

The BLS role is to take in raw UI administrative data and:

• to understand error components,
• to address each with methods and processes,
• to reduce resulting error,
• to yield high-quality economic data, and
• to create a high-quality sample frame for other establishment surveys.

The improvement processes include but are not limited to: efficiency in data collection from large multi-establishment employers through Electronic Data Interchange (EDI); statistically valid procedures for editing, estimating missing reports and data elements, record linkage and standardized processing systems, training of staff; and quality controls procedures for data review. (See sections 2b and 2c on estimation procedures and reliability for details.)^⁠1 After the data have gone through extensive review at the state, regional, and national levels, BLS summarizes these data to produce totals for all counties, MSAs, the states, and the nation by various industrial levels.

Reliability

Since the QCEW is a census, the data are only subject to non-sampling errors. To control for these non-sampling errors, BLS has extensive quality control procedures that include:

1. improved data collection methods especially for large multi-establishment employers through EDI;
2. standardized data processing systems that include edits, imputation, record linkages including address standardization and industrial classification coding;^⁠2 and
3. standardized training of staff at state, regional, and national levels in the review of data according to the guidelines provided by the QCEW policy council and stated in official memorandums (available upon request).^⁠3

Records that fail these edits are individually reviewed. Respondents are contacted often to validate significant movements or to correct the data.

The three most important initiatives undertaken by BLS to enhance the quality of QCEW data are the establishment of the Multiple Worksites Report (MWR) Survey, the Annual Re-filing Survey (ARS), and the development of a new comprehensive processing system for states use. Two separate OMB clearances are obtained for the ARS and MWR Survey. The MWR survey is sent quarterly to multi-establishment employers for the purpose of asking them to break out their consolidated UI reports to the establishment level. For example, some employers provide data for all of their operations within a state or at the county level; the MWR asks the employer to provide information for each establishment so that all records on the file can be at the establishment level, which is generally the sampling unit for most BLS surveys. This also improves the quality of local economic data by more accurately reporting the location and type of economic activity.

The ARS is conducted annually on about one-third of the establishments on the frame for the purpose of updating the industrial classification, business name, reporting and physical location addresses, and auxiliary status. Establishments with more than three employees are eligible for the ARS. Each eligible establishment is placed into a 3-year cohort using a random selection process.  In order to ensure data quality, state and regional staff are trained extensively in industrial classification coding. Additionally, standardized systems are provided to the state and regions to process the data.

Revisions

For the first quarter of each year, QCEW data are published five times. The original data are first released in September of the same year followed by revisions in the following December, March, June, and September. For example, March 2019 data were first published in September 2019, then in December 2019, and subsequently in March, June, and September of 2020. The second-quarter data are published four times; and the third-quarter data are published three times; and the fourth-quarter data are published twice. Table 5 provides data for the initial publication of each quarter in 2019 to their final publication in September 2020. As shown in table 6, the largest revision generally occurs from initial publication to the first revision, as missing reports, including out-of-business reports, for late responding employers come in. The magnitude of revisions is relatively small; that is, less than 0.05 percentage points.

Data collection cycles

The QCEW program is quarterly, as employers are required to file Quarterly Contribution reports (i.e. UI reports) on a quarterly basis.

Methods for maximizing response rates

Response rates are generally very high because employers are required to file Quarterly Contributions Reports under the UI law for each state. The unit response rates for employment are about 96 percent (table 2 and about 97 percent (table 4) for wages as reporting of wages are required by UI law. The response rates based on total covered employment are about 97 percent (table 3), as the nonresponse is mostly concentrated among smaller establishments.

Growth of Electronic Data Interchange (EDI), the direct transfer of data from the firm to BLS, also provides a high level of response and stability. BLS currently collects over 80,000 reports from nearly 100 large firms with about 10 million employees via EDI.  For final estimates, virtually all of these firms provide data by EDI.

BLS initiatives

BLS has undertaken several research initiatives in the control and measurement of nonsampling error. The 1991 Current Employment Statistics (CES) survey’s benchmark employment estimate transmitted to the QCEW revealed a substantial nonsampling error problem caused by payroll-processing firms. The American Statistical Association formed a committee to review BLS procedures and issued a report in January 1994.^⁠4 BLS adopted most of the report’s recommendations. BLS also conducted a Response Analysis Survey (RAS) of payroll-processing firms.^⁠5 The purpose of the survey was twofold: to identify practices that can affect the data collected by the CES survey and the QCEW (the benchmark source data), and to educate payroll processors on proper reporting procedures. In addition, BLS conducted a RAS of CES and QCEW covered employment reporting.^⁠6 The survey identified factors that affected both CES and QCEW reporting within the same firm. Based on these RAS studies, BLS undertook an extensive education program with CES respondents. This included highlighting correct reporting of problem items on the CES report form and the inclusion of special notices on correct reporting in the monthly advance notice fax message. In 2008, another RAS was conducted and an executive summary of the report details the findings of the survey.^⁠7

Statistical aspects contact

Mr. Edwin Robison, Chief, Statistical Methods Staff of the Office of Employment and Unemployment Statistics (phone: 202-691-6363), is responsible for the statistical aspects of the QCEW program. As mentioned in the above paragraph, BLS seeks consultation with other outside experts on an as needed basis. The QCEW Policy Council, composed of 10 state representatives and BLS staff, has been consulted on the content, uses, and methodology of the program.