Monthly Current Population Research Articles

Kauffman Index of Entrepreneurial Activity: 1996-2007

The rate of entrepreneurial activity among women dropped sharply in 2007 while the activity rate among men and immigrants surged, according to a national assessment of entrepreneurial activity by the Ewing Marion Kauffman Foundation. According to the Kauffman Index of Entrepreneurial Activity, the only annual study to measure business startup activity for the entire United States adult population at the individual owner level, 495,000 new businesses per month were started in 2007 with 0.30 percent of the adult population (or 300 out of 100,000 adults) involved in the startup process. This entrepreneurial activity rate is a slight increase over the 2006 rate of 0.29 percent.Several surprising findings from the Kauffman Index are:1. Immigrants far outpaced native-born Americans in entrepreneurial activity, increasing from 0.37 percent in 2006 to 0.46 percent in 2007. Immigrants are now substantially more likely to start businesses than are native-born Americans, which remained constant at 0.27 percent.2. Men are now twice as likely as women to start a business each month, a larger differential than in any previous year of the KIEA study. For men, the entrepreneurial activity rate increased from 0.35 percent in 2006 to 0.41 percent in 2007. The rate decreased from 0.23 percent to 0.20 percent for women.3. The entrepreneurial activity rate among Latinos increased from 0.33 percent in 2006 to 0.40 percent in 2007, the largest increase for any major ethnic or racial group.Data for the Kauffman Index of Entrepreneurial Activity are derived from the monthly Current Population Survey (CPS), a national population survey conducted by the U.S. Bureau of the Census and the Bureau of Labor Statistics. The detailed demographic information available allows researchers to estimate rates of entrepreneurial activity by race, education, region, age and immigrant status and is the most up-to-date estimate of new business activity and the only estimate of business creation by detailed demographic group. Unlike other studies that primarily capture the creation of new employer firms, the Kauffman Index of Entrepreneurial Activity captures all adults 20-64 who initially start a business, including those who own incorporated or unincorporated businesses and those who are employers and non-employers. Capturing new business owners in their first month of significant business activity serves as a leading indicator of new business creation in the United States.

Employment and Self-Employment in the Wake of Hurricane Katrina

Year 2005 brought four severe hurricanes to the U.S. Gulf states, including Hurricane Katrina, an exceptional storm in terms of its magnitude of destruction. The authors examine the short- and long-term effects of Hurricane Katrina on the labor market outcomes of prime age individuals in the states most affected by the hurricane and for evacuees using data from the monthly Current Population Survey. They find that in the states most affected by Hurricane Katrina-Alabama, Florida, Louisiana and Mississippi-employment and unemployment by the end of 2006 were at similar rates as the end of 2003 with the exception of Mississippi, which still had lower employment and higher unemployment at the end of 2006 compared with pre-Katrina levels. By one year after the hurricane, evacuees that returned to their pre-Katrina state of residence have labor force participation rates and unemployment rates at the same level or near that of non-evacuees. Evacuees that relocated (non-returnees) have lower employment rates and higher unemployment rates, both immediately following the hurricane and one year later. Self-employment rates are higher for returning evacuees in all states compared with non-evacuees in those states in the months immediately following the hurricane but are no different one year later. There is some evidence of higher self-employment rates among non-returnees that may be due to poor job prospects in the wage and salary sector or due to new opportunities for starting businesses in the wake of Hurricane Katrina.

Using Earnings Data From the Monthly Current Population Survey

The monthly Current Population Survey (CPS) has collected earnings on individuals' current jobs since 1979 from a quarter of the sample. This paper discusses three unique aspects of the CPS: (1) the 1994 redesign of the CPS data collection methodology, (2) the complex CPS sample design, and (3) the top coding of CPS earnings data. Failure to account for these unique features of the CPS may result in biased estimates and invalid research conclusions. The first part of the paper discusses the motivation for and the effect of changes implemented with the 1994 redesign. To facilitate comparisons over time, adjustment factors to be applied to mean and median hourly earnings, along with 90th and 10th percentile cutoffs, were estimated. Examination of these adjustment factors indicates that failing to account for the redesign could lead to serious mismeaurement in the patterns and magnitude of earnings inequality over time. A common misconception about the CPS is that it is a simple random sample, when in reality it has a complex multistage sample design. The second and third parts of this paper discuss properly accounting for the complex design of the CPS and obtaining design consistent point estimates and variances through the use of weights and replicate methods such as Balanced Repeated Replication (BRR). As part of the discussion of sample weights, a simple test for whether using weights is appropriate is presented. Throughout the discussion of properly accounting for the complex design of the CPS, the effects are illustrated using a standard OLS log earnings regression model. Comparison of results indicate that not properly accounting for the CPS's sample design can significantly underestimate or even reverse some of the estimated effects of education, being in certain minority groups, occupational rewards, or living in certain regions of the country. The paper concludes with a discussion of the effect of top coding individuals' earnings above a certain amount to a predetermined value. Comparison of estimates generated using original confidential untop coded data and publicly released non-confidential top coded data indicate that even though only a small proportion of earnings are top coded, top coding can lead to statistically significant differences, both with respect to simple arithmetic means and parameter estimates from OLS regression models. However, fitting a Pareto distribution to the tail of the earnings distribution using a modified maximum likelihood was found to provide estimates that usually were quite close to those obtained when no top coding was imposed.

Trucking Deregulation and Labor Earnings: Is the Union Premium a Compensating Differential?

This article examines wage determination among union and nonunion truck drivers using the 96 monthly Current Population Surveys for 1983-90. Union density in the previously regulated for-hire sector of the trucking industry fell from about 60% during the regulatory period of the 1970s to about 25% by 1990. Union log wage premiums fell from 0.40 in the 1970s to 0.30 or below in the 1980s. Longitudinal estimates from multiple panels for 1983-84 through 1989-90 suggest far smaller union premiums, supporting the thesis that part of the wage differential following deregulation is a compensating premium for driver quality.

Alternatives for a national data system on elementary and secondary education: A Canadian viewpoint

The discussion papers Alternatives for a National Data System on Elementary and Secondary Education and the Synthesis of Invited Papers may well strike a resonant chord when read by users of Canadian statistics on education. Although there are significant differences between the education systems of the United States and Canada, the authors’ assessment concerning the increasing number of constituencies requiring statistical information on the education system is applicable to Canada as well. These demands are placing increased pressure on all information systems, whether national, provincial or local for more and better information to support policy development and program management. Users have indicated the need for new information in a number of areas, including: more comprehensive information on the education process; measures of outcomes of schooling (for example, there is current interest in the issue of youth unemployment and consequently, the dynamics of the individual’s transition from school to the work place); better information on costs of schooling by level and function; information on adult education which can be analyzed in the context of “a life long learning model of education”. More generally, data users are demanding improved timeliness and more value added to disseminated information through analysis and summary measures. Many have indicated that the presentation of data alone is insufficient; analytic interpretation and profiles which highlight the most important features of the data base are desired. In Canada, the current Education Statistics program draws a major portion of its information from extracts and aggregations of existing school administrative records. The latter source is supplemented by information from the Canadian Census, conducted each five years, and from the monthly Labour Force Survey (the latter being similar to the monthly Current Population Survey of the United States). As with any statistical information derived from administrative records, school records have both strengths and weaknesses. The major positive attribute is the limited respondent burden that the collection process entails (as the information has been collected for administrative purposes in any case). This advantage, however, is offset in many instances by the limited amount of contextual material that these records contain (for example, the limited socio-demographic information contained in administrative microrecords pertaining to individuals), by inter-

Unemployment through the Filter of Memory

This paper uses data from the annual Work Experience Survey to construct a new unemployment series based on respondents' recollection of unemployment over the previous year. It is argued that the ratio of this new series to the official series computed from the monthly Current Population Survey provides an index of the or painfulness of unemployment. Over the past two decades this ratio has declined secularly. About 30 percent of this decrease is due to shifts in the composition of unemployment toward demographic groups with low ratios of remembered to currently reported unemployment. The remainder is due to a secular decline in salience for younger and older people.

Tabulations from the 1957 Current Population Survey on Religion: A Contribution to the Demography of American Religion

This paper presents some previously unpublished data from the Current Population Survey's 1957 interview sample on religion. All of the available data from this sample have now been published. Our review of these data indicates that there has been a structural convergence between white Protestants and Catholics, but that the Jews and blacks have not been parties to this convergence. The necessity for future questions on religion on both the monthly Current Population Survey and the decennial census is discussed.