Business Dynamics Statistics: An Overview

 Excerpt from the overview:

The Business Dynamics Statistics (BDS) includes measures of establishment openings and closings, firm startups, job creation and destruction by firm size, age, and industrial sector, and several other statistics on business dynamics. The U.S. economy is comprised of more than 6 million establishments with paid employees. The population of these businesses is constantly churning—some businesses grow, others decline, and yet others close. New businesses constantly replenish this pool. The BDS series provides annual statistics on gross job gains and losses for the entire economy, and by industrial sector and state. These data track changes in employment at the establishment level, and thus provide a picture of the dynamics underlying aggregate net employment growth.

The Business Dynamics Statistics is a product of the U.S. Census Bureau and was developed by the Center for Economic Studies. The BDS data are compiled from the Longitudinal Business Database (LBD) (Jarmin and Miranda, 2002). The LBD is a longitudinal database of business establishments and firms covering the years between 1976 and 2005 (as additional years of the LBD are available, the BDS will be updated).

The LBD is constructed by linking annual snapshot files from the Census Bureau’s Business Register (BR)1 to provide a longitudinal history for each establishment. The linkage process makes use of numeric establishment identifiers as well as probabilistic name and address matching. The linkage process allows the tracking of net employment changes at the establishment level, which, in turn, allows the estimation of jobs gained at opening and expanding establishments, and jobs lost at closing and contracting establishments.

The LBD originally was conceived and constructed to be a research dataset. It has been used in numerous studies published in leading scholarly journals. It also has seen increased use as a source of special tabulations. The growing demand for tabulations from the LBD is why the Census Bureau has developed the BDS.