EVALUATION OF THE USE OF ADMINISTRATIVE RECORD DATA IN THE ECONOMIC CENSUSES

This paper describes several of the studies conducted by the Bureau of the Census to evaluate the use of admin is t ra t ive records in the 1977 Economic Censuses. In order to reduce processing costs and report ing burden, census data for many small establishments were obtained from administ r a t i v e data of other government agencies rather than from the mail ing of census questionnaires. The admin is t ra t ive data consisted of business c l ass i f i ca t i on codes, sales, pay ro l l , and employment obtained from the Internal Revenue Service and the Social Securi ty Administrat ion. Most establishments with small payrol l in addi t ion to most establishments wi thout payrol l ( i . e . , nonemployers) were not mailed questionnaires in the Economic Censuses. Business Divis ion and Construction S ta t i s t i c s Division of the Bureau of the Census each conducted two studies to analyze the qua l i t y of the admin is t ra t ive data. The studies by Business Divis ion were referred to as the "nonemployer" and "below cuto f f " studies. The nonemployer study (simply defined, a nonemployer is a single establishment f i rm with no paid employees in 1977) was an analysis of the sales and employment data as well as the kind of business (KB) c l a s s i f i c a t i o n as indicated on the adminis t rat ive records. The below cu to f f study compared the sales, pay ro l l , employment, and KB c l a s s i f i c a t i o n from the admini s t r a t i v e records to the corresponding response data obtained by mail ing a census questionnaire to a I0 percent sample of establishments with payro l l below speci f ied cuto f fs . This sample was cal led the Special Inqui ry Sample (SIS). The SIS was used in the Economic Censuses to obtain data for merchandise l ines tabulat ions. Construction S ta t i s t i c s Divis ion conducted a nonemployer study s imi la r to that of Business Divis ion and a second study designed to analyze adminis t rat ive data tabulated in the census for the single un i t employers who were mailed questionnaires but did not respond. Each of the four studies are discussed separately. I . Business Div is ion ' s Nonem_ploye r Study Only admin is t ra t ive data were avai lable for tabulat ing most nonemployers in the Retail and Selected Services Economic Censuses. Thus, a major component of Business Div is ion 's nonemployer study was obtaining response data necessary for the analysis of the corresponding administrat i ve data. A sample of about I0,000 nonemployers was selected for mail ing in the study. The response data were then edited, i . e . , checked for completeness and consistency, and used in the analysis of the sales and employment data and the Pr incipal Indus t r ia l A c t i v i t y (PIA) C lass i f i ca t ion Codes on the corresponding admin is t ra t ive records. The fo l lowing adminis t rat ive record data were used in the study: ( I ) The Social Securi ty Number (SSN) Universe, consist ing of extracted port ions of Form 1040 Schedule C tax returns f i l e d with the Internal Revenue Service (IRS) for 1977; and ~2) the employer i d e n t i f i c a t i o n (El) number zero universe, consist ing of extracted port ions of a l l records for partnership and corporat ion tax returns with pos i t ive receipts and zero (~)) payrol l for 1977. Each record in the SSN universe and each El in the El zero universe (cal led an EI~)) with a PIA c l a s s i f i c a t i o n code wi th in the scope of the study ( i . e . , Retail and Service trade areas) was defined as a sampling un i t The combined universe of ( I ) and (2) covered about 75 PIA c l a s s i f i c a t i o n codes. Designated as nonemployers for th is study were those cases from the universe which had no ind icat ion of employment in 1977 ( i . e . , the cases fa i led to have a l l of the fo l lowing: ( I ) pos i t ive wages; (2) a pos i t ive cost of labor ind ica to r ; and (3) a f lag ind icat ing that during at least one quarter of 1977, a Fore 941 was f i l e d with IRS for report ing payrol l taxes withheld) and had 1977 annual receipts between these cu to f fs :