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Modification to the Current Employment Statistics (CES) Birth /Death Methodology to Improve State and Area Employment Estimates during the Coronavirus Pandemic

Dan McGregor, Michele Walker, and Wendy Zhang


The onset of the COVID-19 pandemic had a huge impact on the labor market, leading to a breakdown in the historical relationship between business openings (births) and closings (deaths), thus breaking the assumptions underlying the BLS birth/death model, which is an important element of the normal BLS methodology. BLS subsequently modified the CES methodology to better reflect the effect of the contribution of business births and deaths to monthly payroll employment estimates. This paper examines the impacts of modifications to the birth/death methodologies on statewide industry-level employment estimates, as well as the correlation between employment estimates and the number of coronavirus cases in states with high infection rates. Results show that the modified procedure modestly improved the overall