This is the methodology for distributing Value Added for data from 2001 - 2018.
Four Components of Value Added
- Employee Compensation
- Proprietor Income
- Other Property Income
- Taxes on Production and Imports net of subsidy
Calculation of Value Added
Labor Income (Employee Compensation and Proprietor Income)
BLS' CEW is our primary source of employment and income data; however, CEW data excludes some Sectors1 and does not include proprietors, proprietor income, employer-paid taxes (social insurance, unemployment), or benefits such as health and private retirement. CEW data will have some non-disclosures (i.e., sectors for which wage and employment data are not revealed). To get employment estimates for these, we use the Census Bureau's County Business Pattern (CBP) employment data. Since CBP does not provide data on wages, we use state-level wage per worker ratios together with the county-level CBP employment data to get county-level wage estimates.
Finally, we turn to the BEA's REA data series to get estimates for Employee Compensation (i.e., fully loaded payroll), Proprietor Income and Employment, and the sectors missing from CEW. Due to the REA data being lagged one year and in a more aggregate sectoring scheme, the CEW data are used to project the REA data to the current data year and to distribute them to the 536 IMPLAN Sectors.
Other Value Added (Other Property Income and Taxes on Production and Imports Net of Subsidies)
The BEA also releases Taxes On Production and Imports net of subsidy (a change in definition from Indirect Business Taxes in past IMPLAN datasets) and Gross Operating Surplus (GOS) data at the 3-digit NAICS level. Gross Operating Surplus includes Proprietor Income and Other Property Income; thus, Other Property Income, for 3-digit NAICS is derived by subtracting our estimates of Proprietor Income from GOS. These 3-digit control values are distributed to the detailed industries based on the Benchmark I-O characteristics for Other Property Income. However, the BEA data are lagged a year and must be projected first, using growth rates from other data sources.
1. The CEW data provides employment and wage information for workers covered by State Unemployment Insurance (UI) laws and Federal workers covered by the Unemployment Compensation for Federal Employees (UCFE) program. Major exclusions from UI coverage include most agricultural workers on small farms, all members of the Armed Forces, elected officials in most states, most employees of railroads, some domestic workers, most student workers at schools, and employees of certain small nonprofit organizations.