Download Adrienne T. Pilot, Director, Statistical Office, Council of Economic

Improving Economic Data
through Data Synchronization
Presentation for
APDU
September 25, 2009
Adrienne Pilot ([email protected])
CIPSEA:
Confidential Information Protection and
Statistical Efficiency Act
• Passed in 2002 with Administration and Congressional support.
Supported by previous Administration.
• Confidential Information Protection:
– Standardized safeguards to protect confidentiality of information
collected by federal agencies for statistical purposes
• Statistical Efficiency:
– Authorized sharing of business data among Census, BLS, and BEA
• Reduce paperwork burdens
• Improve economic statistics
• Increase understanding of the economy
Improve Economic Statistics and
Understanding of US Economy
• Improve the comparability & accuracy of Federal economic
statistics by allowing the agencies to
– reconcile differences in business lists
– develop consistent classifications of businesses into industries
– improve coverage
• Improve the understanding of the U S economy (including key
industries and regions),
– develop more accurate measures of the impact of technology on
productivity growth
– enhance the reliability of the Nation’s most important economic
indicators, such as the NIPAs
Business List Comparison Project
• BLS and Census Business Lists
– Over 30% of single-establishment businesses had
different NAICS industry codes in the two lists
– 15% of single-establishment businesses differed at
the sector level (e.g., construction, manufacturing,
retail trade)
Additional Legislation Needed
• Census business list
– constructed using tax information (such as business name
and address)
– considered to be commingled with information from IRS
• Any use of Federal Tax Information beyond tax
administration must be authorized in the tax code.
• Statistical use of some business tax information is
authorized for Census and BEA. Not, however, for BLS.
• Sharing of business data among Census, BLS, and BEA
would require legislation to modify the tax code.
Proposed Tax Legislation
• Data synchronization legislation would
provide:
– BLS access to Census business data considered
commingled with tax information
– BEA access to industry data on non-corporate
business data (partnerships and sole
proprietorships)
Comparability and Accuracy of
Federal Economic Statistics
• Reconciliation of BLS and Census Business
Lists
– Improved sample frames for surveys
• BEA access to industry level data for noncorporate businesses (partnerships and large
sole proprietorships)
– Improved measurement of income
– Improved measurement of international
transactions
Reconcile GDP and GDI
Reduce the statistical discrepancy
• GDP (Census based)
• GDI (largely BLS based)
Primary measures of national economic activity
used in
• Determining recession or recovery
• Forecasting budget receipts and expenditures
Real GDP Growth in Key Sectors
NAICS Subsector 334
Computer and Electronic Product Manufacturing
– During the 2002 economic recovery there was
uncertainty regarding the health of the IT sector.
– 2002 growth of real value added:
o 7.4% (as published; using BLS payroll data)
o 15.6 % (using Census payroll data)
Distribution of Federal Funds
• BEA per capita personal income data (based largely
on BLS wage data) are used in the formulas to
distribute over $225 billion in Federal funds to States
each year (mainly Medicaid).
• During the State fiscal crisis in 2003, private wage
levels based on BLS data were $2.5 billion higher in
Texas and $7.1 billion lower in Washington than
Census levels.
State and Local Budget Planning
• BLS and Census measures of wage and salary growth
by state sometimes differ by hundreds of millions of
dollars.
• During the early stages of the economic recovery in
2002, these differences would have produced
significantly different projections of state and local
government income received
o $165 million discrepancy in New Jersey
o $193 million discrepancy in Massachusetts
• The $1.2 bill wage growth difference in New York
would have yielded a $173 million discrepancy in
projected state and local revenue.
Report Recommendations
Tax legislation to enable data sharing / data synchronization has been
recommended in the following recent reports:
• 2006
Improving Business Statistics through Interagency Data Sharing
National Academies of Science - CNSTAT
• 2007
Understanding Business Dynamics
National Academies of Science – CNSTAT
• 2008
Innovation Measurement: Tracking the State of Innovation in the
American Economy
A report to the Secretary of Commerce by the Advisory Committee on
Measuring Innovation in the 21st Century