The Business Dynamics Statistics of Single Unit Firms (BDS-SU) is an experimental data product extending the set of statistics published by the Business Dynamics Statistics (BDS) program. The BDS-SU provides year-over-year changes in employment for each quarter of the year for businesses that operate in one location and file their taxes under a single Employer Identification Number (EIN). This product relies on IRS quarterly tax filings to collect employment information for the pay periods including March 12th, June 12th, September 12th, and December 12th. Year-over-year employment changes are calculated between the same point in year t and year t-1 (i.e., June 12th year t-1 to June 12th year t, etc.). Employment growth is labeled as job creation and employment decline as job destruction.
These quarterly single-unit data have numerous advantages. First, because these businesses operate in a single place, the firm, as defined by ownership, is equivalent to the establishment, as defined by location. This simplifies the reporting of business characteristics since age and size are the same for the firm as for the establishment. Second, because the quarterly data allow us to identify the first and last quarters a business had employees, we can date business entry and exit more precisely during the year. Third, the quarterly data also capture large temporary disruptions to the economy that happen in a single year, such as the 2020 COVID-19 pandemic recession or a natural disaster, which would be missed in the traditional BDS annual March-over-March job change estimates. Finally, the quarterly data include payroll, allowing us to calculate payroll creation and destruction in an analogous manner to employment.
Summary of Published Data
The BDS-SU provides quarterly statistics from 2007 Q1 to 2020 Q4. There are 44 tables, each with two versions. One version contains nominal payroll and the other contains real payroll defined in 2012 dollars. Tables are stratified by year, quarter, and firm characteristics and contain the following information:
Tables are stratified by the following characteristics or some combination thereof, with 12 one-way tables, 23 two-way tables, and 8 three-way tables. In addition, there is an economy-wide table stratified only by year and quarter:
Unlike the main BDS, which measures firm age in years, the BDS-SU measures firm age in quarters. While the quarterly employment time series begins in 2007, quarterly payroll data exist back to 1976, allowing us to measure firm age over the same time span as the main BDS. We identify the first quarter a firm had payroll between 1976 Q1 and 2020 Q4 and then measure firm age as the number of calendar quarters between the first and current quarter. In comparison, the main BDS identifies the first year a firm had employment in the pay period that includes March 12th and then calculates firm age as the number of calendar years between the first and current year. If a firm began in the 2nd, 3rd, or 4th quarters of the year, its birth will not be recognized by the main BDS until the following year in March. This annual measurement aggregates births over all the quarters of the prior year and reports them at the end of the 1st quarter each year. The quarterly measurement of the BDS-SU disaggregates these births across the four quarters of the year. The same is true for firm exits.
Another innovation of the BDS-SU product is the addition of payroll measures that mirror the employment measures. These include total payroll, payroll creation (increase relative to the prior year), payroll destruction (decrease relative to the prior year), net payroll creation (total creation – total destruction), and the amount of payroll creation attributed to births and payroll destruction attributed to deaths.
Finally, we publish the ratio of payroll to employment for all single-unit firms, and separately for continuing, entering, and exiting firms. Comparing this ratio for different groups of firms provides information about how average pay per worker varies across industries and geography.