Census Bureau’s Innovative LEHD Program on Local Workforce Dynamics Turns 20

Twenty years ago, the U.S. Census Bureau set out to create a secure database of all jobs in the United States and provide new data and tools to state partners to help them track the health and vitality of their workforce.

What began as a small-scale startup has become the Longitudinal Employer-Household Dynamics (LEHD), a source of innovative data products, including Quarterly Workforce Indicators (QWI), OnTheMap, Job-to-Job Flows (J2J) and Post-Secondary Employment Outcomes (PSEO).

These tools give users access to data with little required training, at no cost to state partners and minimal cost to taxpayers. Also, it doesn’t require workers and employers to collect additional data.

“LEHD provides the data infrastructure and economic statistics necessary to capture the complex interactions between workers and businesses that characterize the dynamics of the modern U.S. economy,” said Keith Bailey, assistant center chief for LEHD Research at the Census Bureau’s Center for Economic Studies.

LEHD started as a small grant-funded startup within the federal government. In the late 1990s, a small team of researchers from various universities began working with Census Bureau researchers to combine wage records from one state, Maryland, with individual and business data already at the Census Bureau.

This pilot was so successful that other states joined the effort.

Census formed a steering committee of state Labor Market Information (LMI) directors and Census researchers to guide the development of data products and the growing Local Employment Dynamics (LED) Partnership. Design teams made up of Census Bureau and state LMI experts researched and developed specific products, attracting more and more state partners.

By 2014, all 50 states and the District of Columbia were participating in the LED Partnership.

LEHD creates new measures of local workforce dynamics by combining data supplied by states via the core LED Partnership with Census Bureau data on individuals and businesses.

Wage records, which states collect from employers each quarter as part of their Unemployment Insurance programs, are key data sources. They account for approximately 96% of wage and salary jobs and contain information on over 100 million jobs each quarter.

The Census Bureau combines the wage records with data it collects on demographic characteristics of workers (age, gender, education, race, and ethnicity) and traits of businesses (industry, location, firm size and age).

It links the information over time to provide a longitudinal view of the ever-changing economy. The result: A complete profile and detailed characteristics of local and national workforce movements for workers and businesses.

This allows anyone (Census Bureau, LED partners, researchers, the general public) to follow the flow of workers between employers across state lines and use the data to gain insight into the dynamics of the workforce both locally and for the country as a whole.

The OnTheMap application is a user-friendly, intuitive tool that makes it easier to evaluate workplace and residence data by geography.

Decision makers, state partners, economists, geographers and others use the data daily to inform local and national labor market policy.

Minneapolis, for example, turned to OnTheMap to evaluate travel costs during morning and afternoon peak hours of traffic after a bridge collapsed there in 2007.

Businesses also use data products. For example, Seattle-based real estate company Redfin uses LEHD data to create its “opportunity score” – a metric that shows potential home buyers a location’s access to jobs.

Working with the LED Partnership, LEHD continues to innovate. One of its newest products expanded its partners to include universities and state departments of education.

Thanks to these new partnerships, the Census Bureau is now producing the Post-Secondary Employment Outcomes (PSEO), which provides earnings and employment outcomes for college and university graduates by degree level, degree major and post-secondary institution.

These statistics come from matching university transcript data with a national database of jobs, using state-of-the-art confidentiality mechanisms to protect the underlying data.

PSEO shows where recent graduates of various colleges and universities have found jobs and how much they earn. That can help students decide which college to attend and what major to study to give them a sufficient return on their college education investment.

The figure below is a visualization of the PSEO tool. The bars for each major represent the median earnings 1, 5 and 10 years after graduation. Users are able to select from available majors, different graduation cohorts and different degree types that an institution offers.

The Census Bureau is working to enhance existing visualizations, expand workforce characteristics and search for new areas of collaboration to improve its data products on the labor market.

Kimberly Jones-Ruiz is a survey statistician in the Census Bureau’s Center for Economic Studies (CES).