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Copyright 1998 by the Wyoming Department of Employment, Research & Planning

Employment Series Differences: Explanation and Interpretation

by: David Bullard

Starting with this issue of Wyoming Labor Force Trends, the Civilian Labor Force and Unemployment table has been expanded to include employment figures for each of the county areas. These estimates come from the Local Area Unemployment Statistics (LAUS) program, often called the household survey because part of the data come from a monthly survey of households. The Current Employment Statistics (CES) figures, found in the Wyoming Nonagricultural Wage and Salary Employment table, come from a monthly sample-based survey of employers (establishment survey). This article will review some of the key differences between the series and interpret their differing behavior in recent years.

The Figure shows employment levels as measured by the two programs. Although CES is called "Total Nonagricultural Employment," there are several types of employment not included in its count. Jobs worked by the self-employed and unpaid family workers are not included. Also, as its name suggests, most agricultural employees are not included. All of these individuals are counted as employed in the LAUS program. This partially explains the differing seasonal patterns so visible in the Figure. Notice that in 1995 and 1996, the CES series has a pronounced dip in the middle of the summer, while the LAUS doesn’t. The difference is accounted for by agricultural workers. The summer dip in the CES series is explained by the summer vacation observed by school districts and the loss of jobs in education not being fully replaced by jobs in other industries. For example, CES employment in June 1996 stood at 231,600 and in July fell to 225,200, a loss of 6,400 jobs. Employment in the local education sector (which includes both school districts and community colleges) fell from 20,400 in June to 11,100 in July (a loss of 9,300 jobs). The difference of 2,900 was made up by increases in Retail Trade, Hotels and other sectors. In LAUS, the dip is filled in by agricultural workers.

Another difference between the two is the data collection process. The CES program counts each job once, while the LAUS program counts each individual once. Such differences might seem trivial, unless one realizes that multiple jobholders account for close to ten percent of employed individuals in the state. An extreme example will show the importance of this concept. If every employed individual in the state took a second job, and no new individuals became employed, the LAUS employment wouldn’t change, but the CES employment would almost double. This would happen because the number of jobs would have increased, but the number of employed individuals would have stayed the same.

Because of the different coverage of employment programs, the gap between them can be interpreted as the number of self-employed and agricultural workers minus the number of multiple jobholders. In 1997, we see the gap get smaller compared to previous years. One interpretation of the narrowing of the gap is that there was an increase in multiple jobholding. However, data on multiple jobholding in Wyoming for 1997 hasn’t been published yet, so the interpretation cannot be empirically tested. A second interpretation is a decrease in the amount of self-employment opportunities. It is hypothesized that a rapidly expanding economy would offer more opportunities for self-employment than one that was experiencing prolonged periods of slow growth. Thus, the simultaneous increase in CES employment and decrease of LAUS employment in 1997 could signal a decline in the number of self-employed individuals.

David Bullard is an Economist, specializing in Local Area Unemployment Statistics (LAUS) with Research & Planning. He is also an Associate Editor of Wyoming Labor Force Trends.

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