The BLS Local Area Unemployment Statistics Program

1
The BLS Local Area Unemployment Statistics
Program

• Sharon P. Brown, Chief
• Local Area Unemployment Statistics
• Bureau of Labor Statistics
• Federal State Cooperative Program for Population
  Estimates
• October 6, 2004 Meeting

2
The BLS LAUS Program

• Program description
• Estimation methods
• Publication of data
• Administrative uses of data
• Use of population estimates by the LAUS program
• Upcoming changes to LAUS

3
The Local Area Unemployment Statistics Program

• LAUS is the cooperative Federal-State program
  responsible for the development of monthly
  estimates of the civilian labor force, total
  employment, and unemployment for more than 7,000
  areas in the nation.
• State partners are the counterparts to the
  Department of Labor
• BLS is responsible for the methodology, data
  review, and validation.
• States are responsible for producing the
  estimates.
• Both BLS and States publish the data.

4
The LAUS Program in Brief

• Data Civilian labor force, total employment,
  total unemployment, unemployment rate
• Geography States, DC, Puerto Rico, metropolitan
  areas, small labor market areas, counties, cities
  and towns in New England, cities of 25,000
  population elsewhere
• Estimation Model-based, with varying levels of
  sophistication
• Frequency Monthly
• Uses Economic analyses, labor market studies,
  Federal fund allocations
• Concepts CPSthe official measurement of the
  labor force

5
LAUS estimation States and selected areas

• Current LAUS models
• Are signal-plus-noise models of the unemployment
  rate and employment-population ratio with CPS,
  non farm wage and salary employment, and
  population estimates as inputs
• Are seasonally adjusted externally
• Use the State annual average CPS employment and
  unemployment levels as benchmarks
• Rely on population estimates as an independent
  control
• Lack published error measures

6
LAUS Substate Area Estimation

• Labor Market Area
• An economically integrated geographic area within
  which individuals can reside and find employment
  within a reasonable distance or can readily
  change employment without changing their place of
  residence.
• OMB-designated metropolitan areas
• BLS-designated small labor market areas
• Building block approach used to the area
  estimation
• Labor Market Areas are controlled to the State
  estimates
• Counties (of multi-county areas) and cities are
  developed through disaggregation

7
Use of Population Estimates in the LAUS Program

• LAUS uses CNP 16 for direct estimation, and
  resident pop for disaggregation
• Intercensal population controls affect CPS
  employment and unemployment inputs to current
  LAUS models
• Intercensal population controls are used in
  annual benchmarking to adjust current model
  inputs and as independent controls for employment
  and unemployment
• Intercensal population estimates at the county
  and city level are used the disaggregation
  methods for county and city LAUS estimates

8
Publication of LAUS Estimates

• News releases and reports
• Monthly Regional and State release
• Typically, two weeks after the national release
• Monthly Metropolitan Area release
• Typically, one and one-half weeks later
• All area LABSTAT release
• One week after met area release
• Annual Region and State release
• Geographic Profile
• Annual average CPS data for States and selected
  areas
• Special analyses, tables, maps
• Internet/website http//www.bls.gov/lau/home.htm

9
Administrative Uses of LAUS Data

• LAUS data are used to allocate more than 40
  million in federal funds to States and areas
• Department of Labor programs Dislocated
  workers, youth, Job Service and Unemployment
  Offices, disadvantaged workers -- 3.8 billion
• Agriculture--Food Stamp waivers--26.4 billion
• Health and Human Services programs Welfare
  assistance -- 10.2 billion
• Commerce/EDA public works programs -- 240
  million
• Preference in contracting, immigration visas,
  grants for financial institutions, projects, and
  infrastructure in distressed communities

10
LAUS Redesign Purpose and Objectives

• Improving the quality and quantity of LAUS
  estimates
• Accurately reflect the labor market The labor
  force estimates will incorporate the necessary
  decennial updates to methodology and geography.
• Accurately measure the labor force The accuracy
  of the labor force estimates will be affected
  through improved and innovative methodology that
  results in smaller revisions.
• Improve our analysis of the labor force Labor
  market analysis will be enhanced by the provision
  of measures of error and improved seasonal
  adjustment.
• Expand the information we have on the local labor
  force ACS demographic and economic data may be
  useful in generating current LAUS estimates by
  age, race, and sex.

11
LAUS Redesign Activities

• Third generation models with real-time
  benchmarking
• More modeled areas
• Improved operating system for model-based
  estimates
• Handbook improvements
• Updated geography
• Updated decennial census inputs
• Improved quality of UI data

12
LAUS Redesign Models

• Third generation of LAUS models
• Bivariate models of employment and unemployment
  that model UI claims, CES employment, and their
  interaction with appropriate CPS series
• Real-time benchmarking uses monthly national CPS
  levels of employment and unemployment
• Provide for direct model-based seasonal
  adjustment
• Produce measures of error on over-the-month and
  over-the-year change for both seasonally adjusted
  and not seasonally adjusted series

13
LAUS Redesign ActivitiesMore modeled areas

• Redesign Objective The use of statistically
  sound modeling will improve the methodological
  basis of area estimates
• Criteria
• Consistent time series, no interstate areas, only
  one area per State
• Reasonable CV
• Relative consistency in geographic composition
  based on 1990 and 2000 definitions
• Good model diagnostics
• Selected areas
• Chicago MD Detroit MD New Orleans MA
• Cleveland MA Miami MD Seattle-Everett MD
• And respective balance-of-State areas

14
LAUS Redesign ActivitiesUpdated geography

• Metropolitan areas and small labor market areas
  will be revised, both conceptually and
  geographically
• Revised standards, as well as demographic shifts,
  will result in new geography
• Metropolitan divisions and micropolitan areas
  will be implemented in the LAUS program
• The updated geography will be reflected in
  Geographic Profiles based on geographic
  composition of CPS areas and area variance

15
LAUS Redesign Implications for Population
Estimates

• Intercensal population estimates will continue to
  be used to adjust LAUS model inputs
• Intercensal population estimates will continue to
  be used as annual benchmark controls for States
• Intercensal population controls will be needed
  for more areasthe 12 additional modeled
  areasand more will come
• Intercensal population estimates for counties and
  cities will continue to be used in LAUS
  disaggregation

16
LAUS Redesign Key Dates to Implementation

• Federal Register Notice November 8
• First box note in Region/State release November
  19
• FRN comment period closed December 10
• Final Federal Register Notice January 14, 2005
• January 2005 Region and State release March 10,
  2005
• For more information on the LAUS Redesign , go to
  http//www.bls.gov/lau/lausredesignqa.htm