Quarterly Census of Employment and Wages (QCEW)
Quarterly Census of Employment and Wages (QCEW)
The data on tax exempt entities under the IRS Section 501c(3) come from the Quarterly Census of Employment and Wages (QCEW), which is administered by state Labor Market Information agencies (e.g., the Department of Labor in New York or Maryland Department of Labor, Licensing, and Regulation) and at the federal level by the Bureau of Labor Statistics (BLS). QCEW is an administrative dataset collected by states as a part of the federal Unemployment Insurance (UI) program and draws on the quarterly surveys of workplaces that state employment security offices have conducted since the 1930s. QCEW accounts for approximately 97 percent of all wage and salary civilian employment nationally (however, the program does not cover self-employed and family workers). Under federal law, all nonprofit places of employment with four or more employees are required to participate in the unemployment insurance system. However, 22 states also extend this requirement to places of employment with one or more employees.
The principal exclusions from the QCEW dataset vary by state and include employees of religious organizations, railroad workers, small-scale agriculture workers, domestic service workers, crew members on small vessels, state and local government elected officials, and insurance and real estate agents who receive payment solely by commission. However, QCEW data encompass approximately 97 percent of nonfarm employment—providing a virtual census of employees and their wages as well as the most complete universe of employment and wage data, by industry, at the State, regional, and county levels. In terms of nonprofit employment, the exclusion of religious organizations as well as entities with less than four employees is the most significant; however, religious organizations may elect to be covered by the unemployment insurance program and those that do are covered in the data. At this time the exact number of employees in tax-exempt establishments not covered by QCEW is not known, but we estimate it to be no more than 3 percent of total employment in the nonprofit sector.
Finding Nonprofits in the QCEW
While nonprofit places of employment have long been covered by the QCEW surveys, the data generated by these surveys have never broken out the nonprofit employment separate from the for-profit employment. As a consequence, the nonprofit sector has essentially been buried in the data. The Johns Hopkins Center for Civil Society Studies’ Nonprofit Economic Data Project has developed a methodology of identifying nonprofit employers in the QCEW micro-data by record matching with the publicly available register of tax exempt entities maintained by the Internal Revenue Service (IRS). The nonprofit micro-data were subsequently aggregated by county and fields of activity to meet the federal disclosure rules, mandated by law to protect the confidentiality of company specific information. The result is the most accurate and up-to-date picture of nonprofit employment yet available.
In 2014, BLS started releasing nonprofit data at the national and state level but not the county level, following a similar methodology of record matching. However, BLS improved that methodology by adding organizations called “reimbursables” that were not included in the IRS business register. Reimbursables are organizations that under state unemployment laws are not required to pay unemployment insurance contributions each quarter, but rather are allowed to reimburse the unemployment insurance system when a claim is made. Most states will restrict such units to 501(c)3 nonprofits. The QCEW micro data include information on reimbursables. More information is available here.
The data available on this website combine the sets assembled by the JHU researchers with those produced by the BLS. Specifically, the national- and state- level aggregates by industry between years 2007-2011 and 2016 have been produced by the BLS whereas all the remaining aggregates have been produced by the Center for Civil Society Studies.
Population and Income Data
The data on population come from the U.S. Census Bureau and data on personal income and the data of personal income and low income, disability, and unemployment assistance have been assembled by the Bureau of Economic Analysis.
Data Limitations and Suppression
The primary limitation of the nonprofit employment data come from the federally mandated disclosure rules that require suppression of statistical information that allows the identification of single institutional units. This suppression is applied at the industry level. In practice, this suppression can take two forms. First, the so-called “primary suppression” is applied when aggregates contain fewer than 3 units or when a single unit exceeds 80 percent of the aggregate total. Due to the large number of nonprofit aggregates on this website, the primary suppression rules that guided the data assembly by JHU researchers are somewhat stricter and require at least 10 units per aggregate and maximum 75 percent of the aggregate total per single unit. Second, the so-called “secondary suppression” must be applied if the value of the non-disclosable aggregate can be calculated from the disclosed values (e.g. by subtraction); when this is the case, the disclosure of additional aggregates must also be suppressed to eliminate this possibility.
The second limitation that applies to the nonprofit data arises from the fact that access to microdata is restricted in some states. As a result, the JHU research team could only produce aggregates for the following five states: Massachusetts, Mississippi, New Hampshire, Oregon, and Wyoming. The data for these states covering years 2007-2011 are therefore available only from the 2014 BLS data release that does not include county-level breakdowns of these data. As a result of this limitation, nation-wide data for years prior to 2007 are not available.
The 2015 nonprofit employment data was estimated based on trend data in each state observed in the 2007-2012 data released by the Bureau of Labor Statistics (BLS). In all states, nonprofit employment increased follow a linear trend, which allows making a year-to-year projections with reasonable accuracy. To make the 2015 nonprofit employment projections, a regression equation based on 2007-2012 annual observations was calculated for each of the 50 states, in which the independent variable was the year and the dependent variable was the number of nonprofit employees. This equation was then used to make the 2015 nonprofit employment projection in that state. These data were then distributed by 2-digit NAICS activity/industry codes on the state level and by county where possible. Data on the county level are available only as county totals, as they cannot be broken down by specific industry with reasonable accuracy. Data are available for all states and approximately 1800 counties. Based on the regression formula and comparisons to historical data, we believe that the estimated state-level totals are accurate within the -1.1% and +2.1% range of the actual value. The accuracy of the 2-NAICS and county level data could not be estimated but is likely to be lower than that of the state-level totals.
Wages and numbers of establishments were not estimated for this year due to greater non-linear variations and thus lower reliability of projections. Similarly, data were not distributed by the more specific 3-digit NAICS industry code level because the state level data released by the BLS do not have this level of detail at this time. Total and private employment figures were obtained from the standard BLS release of Quarterly Census of Employment and Wages data.