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May 2006

Impact of business births and deaths in the payroll survey

Kirk Mueller

The CES probability-based sample redesign accounts for most business birth employment through the imputation of business deaths, with the remaining portion estimated by a net birth/death model. This article discusses the underlying assumptions of the model and the rationale behind them. It also discusses the reasons why the total accounting for business births is cyclically sensitive, in spite of the use of the forecast net birth/death values. Lastly, it draws comparisons between the bias adjustment model of the quota sample design and the net birth/death model of the probability sample design.

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