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Predicting Births In The Current Employment Statistics Survey

Steve Woodruff


The Current Employment Statistics (CES) survey is a monthly survey of about 400,000 business establishments. It is used to estimate total national non-farm employment and other economic statistics. The universe for this survey is known as the ES-202 and is constantly changing due to some establishments going out of business and others starting up. An establishment is defined as an Unemployment Insurance (UI) account on the ES-202 file. The effect of these births (new UI accounts) and deaths (UI accounts that stop reporting) remains an important source of non-sampling error. Karlin's book "A First Course in Stochastic Processes" ,1972, outlines several "Birth and Death Processes" that may describe these changes in the ES-202. Karlin's outline describes birth and death processes without regard to model fitting or parameter estimation. This paper describes maximum likelihood, minimum statistical distance, and nonlinear regression estimators for birth and death process parameters. Historical ES-202 data up to some time point are used for parameter estimation in a birth and death model and this model is used to predict the number of births that occur for the next few months after this time point. These predictions are compared to births on the ES-202 file and these comparisons are repeated for a variety of time periods, industries, and size classes.

KEY WORDS: Birth and Death Process, Maximum Likelihood, Minimum Distance, Nonlinear Regression