Linked Employer-Employee Database Research Articles

Big data and semantic technology: A future for data integration, exploration and visualisation

In a world of ever increasing data availability and user expectations, National Statistical Offices face mounting chal- lenges to produce relevant and timely statistics. They need to transform their business practice to take advantage of big data - especially administrative data - by integrating non-traditional and survey data sources to maximise value, and utilising new technology to enable enhanced analysis. An example of a response to these challenges is the prototype GLIDE (Graphically Linked Information Discovery Environment) the Australian Bureau of Statistics (ABS) is currently developing using semantic web technology. This environment includes as a test case a prototype semantic linked employer-employee database (LEED) which integrates administrative tax data and ABS business register data to enable detailed microeconomic analysis. However, as data structures become more complex and multi-dimensional, data integration and exploration encounters challenges within traditional relational databases, prompting the exploration of alternatives. Semantic web technology allows for a flexible data structure, machine reasoning and inference on the dataset, a shared understanding of the data's meaning, reusable classifications and standards, easy exploration of many dimensions, and network analysis. The possible advantages of such an approach for official statistics are demonstrated through two practical examples, showing how the prototype GLIDE supports effective data exploration and visualisation, and enables network analysis, to solve real business problems.

Wage Effects of Trade Reform with Endogenous Worker Mobility

In this paper, we use a linked employer–employee database from Brazil to evaluate the wage effects of trade reform. With an aggregate (firm-level) analysis of this question, we find that a decline in trade protection is associated with an increase in average wages in exporting firms relative to domestic firms, consistent with earlier studies. However, using disaggregated, employer–employee level data, and allowing for the endogenous assignment of workers to firms due to match-specific productivity, we find that the premium paid to workers at exporting firms is economically and statistically insignificant, as is the differential impact of trade openness on the wages of workers at exporting firms relative to otherwise identical workers at domestic firms. We also find that workforce composition improves systematically in exporting firms, in terms of the combination of worker ability and the quality of worker–firm matches, post-liberalization. These results stand in stark contrast to the findings reported in many earlier studies and underscore the importance of endogenous matching and, more generally, non-random labor market allocation mechanisms, in determining the effects of trade policy changes on wages.

The nexus between labor diversity and firm’s innovation

In this paper, we investigate the nexus between firm labor diversity and innovation by using data on patent applications filed by firms at the European Patent Office and a linked employer–employee database from Denmark. Exploiting the information retrieved from these comprehensive data sets and implementing proper instrumental variable strategies, we estimate the contribution of workers’ diversity in cultural background, education and demographic characteristics to valuable firm’s innovation activity. Specifically, we find evidence supporting the hypothesis that ethnic diversity may facilitate firms’ patenting activity in several ways by (a) increasing the propensity to (apply for a) patent, (b) increasing the overall number of patent applications, and (c) by enlarging the breadth of patenting technological fields, conditional on patenting. Several robustness checks corroborate the main findings.

Heterogeneous Firm Responses to Rising Teenage Wages

Abstract. Substantial youth minimum wage changes in New Zealand between 2000 and 2007 raised teenage average wages by 5–10 per cent relative to those for adults. We use Statistics New Zealand's Linked Employer–Employee Database (LEED) to examine whether firms' teenage labour demand responses to these changes are greater for firms with higher teenage‐employment share. We find evidence that high teen‐employers reduced their teen employment relative to other firms and had lower survival rates over the period. However, firms that entered the main teen‐employment industries had higher teen‐employment shares than continuing firms. The results are consistent with endogenous technology adoption in response to non‐marginal changes in relative wages.

Two's Company: Human Capital Composition and Performance of Entrepreneurial Pairs

We study the effects of diverse team composition on the survival and growth of new ventures using the Danish Linked Employer-Employee database. To get cleaner measures of diverse team composition, we focus on entrepreneurial dyads, and also investigate the asymmetric e ects of team composition by distinguishing between the 'primary' and the 'secondary' founder. We complement existing work by showing that heterogeneity in team composition is a ected by the asymmetric hierarchical structure within the team, and that a unidimensional diversity indicator (which is usually applied) fails to capture a number of performance effects of heterogeneous team composition. Ventures with a STEM-educated primary founder and a Business-educated secondary founder have high employment growth, while the opposite combination (Business first, STEM second) has low employment growth. Pairs of younger individuals have lower survival chances but higher employment growth. Family firms have lower employment growth, especially when formed with your mother.

Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings

New Zealand has a unique accident insurance system that pays the direct costs of all injuries and compensates workers up to 80% of their earnings for any time that they are unable to work. To estimate the effect of injuries on labor market outcomes, the authors use Statistics New Zealand's Linked Employer-Employee Database (LEED) covering the period April 1999 to March 2004 using a difference-in-differences matching approach. They use two alternative matching criteria to construct control groups of non-injured workers whose pre-injury characteristics are similar to those of injured workers: the first uses only characteristics of the workers whereas the second exploits the nature of the LEED and matches workers in the same firm. Findings indicate that injuries resulting in more than three months of earnings compensation have negative effects on future labor market outcomes that do not decline with time post-injury. The results are broadly similar using both matching criteria, providing more validity to the authors' findings.

Quantifying the Third Sector in Portugal: An Overview and Evolution from 1997 to 2007

This article presents a global overview of the third sector in Portugal drawing on data from a linked employer–employee database—“Quadros de Pessoal,” which is based on a compulsory annual inquiry to organizations, making it a better source of information than those based on sample surveys and estimates. This study advances on previous overviews by providing more updated numbers for organization size, age, gross revenue and employment levels, as well as their distribution across the ICNPO third sector activity classification. The evolution of these variables from the period 1997 to 2007 is also analyzed. The Portuguese third sector has been fast growing, with revenues amounting to 5.64% of Portugal’s GDP and employment representing 4% of the country’s employment in 2007. It is mainly composed of very small organizations, with diminutive revenues. Perhaps its most striking features are the uneven distribution of employment and revenue and the strong concentration on social services.

An Analysis of Teenage Employment by Firms: 1999/00-2006/7

This paper uses data from Statistics New Zealand 's Linked Employer-Employee Database (LEED) to analyse the teenage employment responses of high teen employment firms in the four main teen employment industries to increasing relative wages of teen workers over the period 2000-2007, against a backdrop of substantial increases in the minimum wages for teenage workers. Among continuing firms, we find mixed evidence whether high teen- employers reduced their teen employment relative to other firms over the period. Analysing changes over the period as a whole, we estimate that initial high teen-employing firms reduced their subsequent teen employment by 2.5-3 percentage points for firms in the main teen-employing industries: however, analysing annual changes, we find small and insignificant effects for these firms. We also find preliminary evidence that high teen employment is associated with firm entry and exit: firms in the main teen-employing industries with high teen-employment at the beginning o f the period, had about a 3 percent lower survival rate than other firms: while firms entering the main teen-employing industries during the period had about 2 percent higher teen-employment shares in the final year than continuing firms.

Cyclical Earnings Variation and the Composition of Employment

This paper uses Statistics New Zealand’s Linked Employer-Employee Database (LEED) to assess the extent and impact of such changes in the employment composition of workers and firms over this period. LEED provides comprehensive coverage of all wage and salary employment since 1999. It enables longitudinal linking of both workers and firms, and also of the jobs that link them. As the LEED data do not directly measure hours worked or hourly wages, we construct a measure of the full-time equivalent (FTE) annual earnings rate associated with each job observed. Our analysis uses a linear model that regresses log (FTE annual earnings) on worker demographics (sex and age) and aggregate male and female time effects, and also controls for the effects of constant unobserved worker and firm specific factors. We use the estimates from this model, together with the employment transition patterns of workers and firms over the period, to investigate in detail the effects of compositional change on average earnings.

Job Employment Intensity, Matching and Earnings 1999-2005

In this paper, we exploit the worker-firm “link” information in the Linked Employer-Employee Database (LEED) to describe the patterns of employment intensity in jobs, matching between workers and firms, and the effect on job-level employment and earnings. First, we characterise workers’ annual employment experiences by their full-time (within month) and full-year (across months) dimensions, and firms’ mix of full-time and full-year jobs, and describe the extent of matching along these dimensions. We identify substantial cross-sectional variation in average employment intensity separately for workers and for firms, and some evidence that high-intensity workers are disproportionately employed in high-intensity firms. We then examine the relationship between jobs’ employment intensity and their earnings rates. Although there is a strong positive correlation between employment intensity and earnings that is largely associated with the full-time dimension, after controlling for other worker and firm factors, we find that there is only a modest direct impact of intensity on earnings. We conclude that the earnings premium associated with the full-time employment intensity is relatively small, and there is a premium for part-year work. The full-time employment intensity premium consists of both a continuous gradient across part-time levels and a discrete premium associated with full-time work.

Earnings Heterogeneity and Job Matching - Evidence from Linked Employer-Employee Data

This paper uses data from Statistics New Zealand’s linked Employer-Employee Database (LEED) over the six-year period April 1999 – March 2005 to derive and analyse estimates of two-way worker and from fixed efforts components of job earnings rates. The fixed effects estimates reflect the portable earnings premium that each worker receives in whichever firm they work for, and the time-invariant premium that each firm pays to all the workers in employs. We focus on three issues. First, how much of the variation in job earnings rates is attributable to observable worker demographic factors (age and gender), unobserved worker effects and unobserved firm effects? Second, how much compositional change occurred during this period of substantial employment growth? Third, what is the aggregate pattern of sorting of workers and firms across jobs?

An Analysis of Teenage Employment by Firms, 1999-2007

Changes to youth minimum wage legislation in New Zealand together with steady increases in minimum wages since 2001 have contributed to substantial increases in the minimum wages for teenage workers, and significant increases in the number of teen workers earning at or near minimum wages. With these changes as a backdrop, this paper uses data from Statistics New Zealand’s Linked Employer-Employee Database (LEED) to document the pattern of firm-level teenage employment over the period 2000-2007, and analyse the responses of firms to the increasing relative wages of teen workers.