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Manufacturing Establishments Reclassified Into New Industries: The Effect Of Survey Design Rules

Author

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  • Robert H Mcguckin
  • Suzanne Peck
Abstract
Establishment reclassification occurs when an establishment classified in one industry in one year is reclassified into another industry in another year. Because of survey design rules at the Census Bureau these reclassifications occur systematically over time, and affect the industry-level time series of output and employment. The evidence shows that reclassified establishments occur most often in two distinct years over the life of a sample panel. Switches are not only numerous in these years, they also contribute significantly to measured industry change in industry output and employment. The problem is that reclassifications are not necessarily processed in the year that they occur. The survey rules restrict most change to certain years. The effect of these rules is evidenced by looking at the variance across industry growth rates which increases greatly in these two years. Whatever the reason for reclassifying an establishment, the way the switches are processed raises the possibility of measurement errors in the industry level statistics. Researchers and policymakers relying upon observations in annual changes in industry statistics should be aware of these systematic discontinuities, discrepancies and potential data distortions.

Suggested Citation

  • Robert H Mcguckin & Suzanne Peck, 1992. "Manufacturing Establishments Reclassified Into New Industries: The Effect Of Survey Design Rules," Working Papers 92-14, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:92-14
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    File URL: https://www2.census.gov/ces/wp/1992/CES-WP-92-14.pdf
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    References listed on IDEAS

    as
    1. Timothy Dunne & Mark J. Roberts & Larry Samuelson, 1988. "Patterns of Firm Entry and Exit in U.S. Manufacturing Industries," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 495-515, Winter.
    2. John R. Baldwin & Paul K. Gorecki, 1990. "Firm Entry and Exit in the Canadian Manufacturing Sector," Working Paper 767, Economics Department, Queen's University.
    3. Thomas A Abbott III & Stephen H Andrews, 1990. "The Classification of Manufacturing Industries: an Input-Based Clustering of Activity," Working Papers 90-7, Center for Economic Studies, U.S. Census Bureau.
    4. John R. Baldwin & Paul K. Gorecki, 1991. "Firm Entry and Exit in the Canadian Manufacturing Sector, 1970-1982," Canadian Journal of Economics, Canadian Economics Association, vol. 24(2), pages 300-323, May.
    5. John Haltiwanger & Steven J Davis & Scott Schuh, 1991. "Published Versus Sample Statistics From The ASM: Implications For The LRD," Working Papers 91-1, Center for Economic Studies, U.S. Census Bureau.
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    Cited by:

    1. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
    2. Joe Mattey, 1993. "Evidence on IO Technology Assumptions From the Longitudinal Research Database," Working Papers 93-8, Center for Economic Studies, U.S. Census Bureau.
    3. Suzanne Peck, 1993. "Testing the Advantages of Using Product Level Data to Create Linkages Across Industrial Coding Systems," Working Papers 93-14, Center for Economic Studies, U.S. Census Bureau.
    4. Edward L. Glaeser & William R. Kerr, 2009. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 623-663, September.
    5. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May.
    6. Jensen, J Bradford & McGuckin, Robert H, 1997. "Firm Performance and Evolution: Empirical Regularities in the US Microdata," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 6(1), pages 25-47.

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