Transcript Slide 1

Overview of the Bureau of
Economic Analysis
Regional Accounts at the BEA
Robert L. Brown
Monitoring Mississippi: Data & Tools for Understanding Our State
and Local Economies
Jackson, Mississippi
April 3, 2008
BEA Mission
 To promote a better understanding of
the U.S. economy by providing the most
timely, relevant, and accurate economic
accounts data in an objective and costeffective manner
 The nation’s economic accountant:
comprehensive double-entry accounts and
economics
www.bea.gov
What Do We Produce?
 National Economic Accounts
 Gross Domestic Product (GDP)
 Personal Income
 Price Measures
 International Economic Accounts
 International transactions
 Direct investments
 Operations of US and foreign multinational companies
 Industry Accounts
 Input-output accounts
 GDP by industry
 Travel and tourism satellite account
www.bea.gov
What do we produce?
 Regional economic accounts
 Gross domestic product (GDP) by state
 Prototype estimates of GDP for metropolitan
areas
 Personal income for states and local areas
 Regional economic multipliers—RIMS II
www.bea.gov
Gross Domestic Product (GDP) by State
 Most comprehensive measure of overall
state economic activity
 GDP by State is the sum of
 Compensation of employees
 Gross operating surplus
 Taxes on production and imports
 1963-2006 estimates
 Available 6 months after end of year
www.bea.gov
GDP for Metropolitan Areas
 Prototype estimates of GDP for metro
areas
 2001-2005 released in September 2007
 Update planned for Fall 2008
www.bea.gov
Personal income
 The most current, comprehensive and
consistent measure available of
household income
 Comprehensive: measures income
received by persons from
 production (returns to labor and capital)
 business and government transfers
 Consistent across time and geography
www.bea.gov
Relation of GDP by State to Personal Income (PI)
GDP by
State
Accrual basis
PI
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Disbursement basis
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Wages and salaries
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Employer contributions for employee pension and insurance funds
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Employer contributions for government social insurance
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Proprietors’ income
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Taxes on production and imports less subsidies
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Corporate income
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Rental income
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Compensation by place of work
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Receipts on assets (dividends, interest)
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Transfer receipts (Social Security benefits, Medicare, Medicaid)
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www.bea.gov
State personal income
 Quarterly estimates by place of residence
from 1948
 3 months after the end of the quarter
 Annual estimates by place of residence from
1929
 Preliminary 3 months after end of year
 Detailed 9 months after the end of the year
 Includes per capita and disposable personal
income estimates
 Annual earnings, compensation, wages, and
employment by industry by place of work
www.bea.gov
Local area personal income
 Annual data from 1969
 Metro area now released 9 months after end of year
 County compensation released 12 months after end of year
 County PI released 16 months after end of year
 Geographic availability:
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3,111 counties
363 Metropolitan Areas
576 Micropolitan Areas
179 BEA Economic Areas
 Industry detail by place of work
 Compensation by county and industry available 12 months
after reference year
 Earnings and employment county available 16 month after
end of year
www.bea.gov
Personal income growth rates across 3111 counties,
2004-05
www.bea.gov
Uses of BEA’s regional personal income
 By the US Govt, to distribute >$215 billion in
federal funds to states
 By the states, to develop state government
revenue and expenditure estimates
 21 states have tax or spending limits tied to state
personal income
 By business, to determine areas for new
business location and expansion decisions
 Local areas for impact statements, income
and employment dynamics analysis
www.bea.gov
Regional Input-Output Modeling System
RIMS
 Multipliers show impact of output
change in any industries on 60 industry
groups and the area total
 Effects on output, employment, and
labor earnings
 Customized product produced for a fee
www.bea.gov
www.bea.gov
www.bea.gov
What’s Behind the Regional
Personal Income Statistics, And
What Lies Ahead
Key local area statistics
 Total personal income
 All income received by residents
 Per capita personal income
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Personal income divided by population
Indicator of economic well-being
Earnings by place of work and by industry
Proxy for production
Industrial structure
 Dividends, interest, and rent
 Income from assets and housing
 Transfer receipts
 Social Security, government-administered medical, income
maintenance
www.bea.gov
Alternative Incomes
Per Capita Income (dollars), Mississippi, 2005
30,000
20,000
10,000
0
Adjusted Gross Money Income
Income (IRS)
(Census)
www.bea.gov
Personal
Income (BEA)
Per Capita Income Change 2004-05
(Dollars)
Mississippi
1,400
1,200
1,000
800
600
400
200
0
Adjusted Gross
Income (IRS)
www.bea.gov
Money Income
(Census)
Personal Income
(BEA)
Per Capita Income, 2005, dollars
Alabama
Louisiana
Mississippi
Tennessee
www.bea.gov
Adjusted
Gross
Money
Income
Income
(IRS) (Census)
19,486
19,955
17,223
18,853
15,589
16,772
20,695
20,836
Personal
Income
(BEA)
29,255
24,781
25,454
31,001
How We Produce the Estimates
 Administrative record information
 Advantage--provides detailed information at low
cost
 Disadvantage--does not precisely match what is
being estimated—must make adjustments to
compensate for differences
 Some census data--quinquennial Agriculture
and decennial Population and Housing
 Very little from survey information
www.bea.gov
Sources of Data
60%
BLS
5%
23%
Other
IRS
Personal
Income
CMS
6%
www.bea.gov
SSA
6%
Derivation of Personal Income
Wage and salary disbursements
+ Supplements to wages and salaries
=
Compensation
+ Proprietors’ income
=
Earnings (place of work)
— Contributions for govt. social insurance
+ Adjustment for residence
=
Net Earnings (place of residence)
+ Dividends, interest, and rent
+ Personal current transfer receipts
=
Personal income
www.bea.gov
Wage & Salary Disbursements
 55% of personal income (2005)
 Based primarily on Quarterly Census of
Employment and Wages (QCEW) report
 Byproduct of Unemployment Insurance (UI)
program
 Excellent quality--Most workers are covered by UI
 Other data sources used for 6% of
noncovered workers & under-reported wages
& tips
 Data are by place of work
www.bea.gov
Supplements to Wages & Salaries
 13% of personal income
 Employer contributions to:
 Pension & private insurance funds (9%)
 Govt. social insurance funds (4%)
www.bea.gov
Real Compensation & Wages per Worker,
United States, 2000=1.0
1.10
1.08
Compensation
1.06
1.04
Wages
1.02
1.00
2000
www.bea.gov
2001
2002
2003
2004
2005
2006
Real Compensation & Wages per Worker, Mississippi,
2000=1.0
1.14
1.12
1.10
Compensation
1.08
1.06
Wages
1.04
1.02
1.00
0.98
2000
www.bea.gov
2001
2002
2003
2004
2005
2006
Proprietors’ income
 9.2% of personal income (farm 0.4%,
nonfarm 8.8%)
 Farm:
 Based on US Department of Agriculture
data
 Nonfarm:
 Based on tabulations of IRS tax returns—
Schedule C & partnership Form 1065
 Adjusted for misreported income
www.bea.gov
Contributions for Govt. Social Insurance
 8% of personal income
 This is a deduction in the derivation of
personal income
 Mostly contributions for Social Security
& Medicare
 Contributions from Employers,
Employees, & the Self-Employed
www.bea.gov
Adjustment for Residence
 Place of work compensation and
earnings
 Shows location of production
 Used as proxy for current production
 Place of residence income
 Indicator of economic well-being
 Shows where income is available for tax
planning and for spending analyses
www.bea.gov
Adjustment for Residence
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<0.5% of personal income nationally
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Mississippi:
 Hinds, Ms
 Harrison, Ms
 Jackson, Ms
 Rankin, Ms
Louisiana
 Orleans, La
 St. Tammany, La
2.9%
-21.3%
-11.8%
4.7%
16.4%
-0.1%
-65.0%
40.0%
Inter-county commuters
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www.bea.gov
Based on Census Journey to Work data & updated with
IRS wages (place of residence)
Dividends, Interest, & Rent
 16% of personal income
 Nearly 1/2 of interest is received by
pension funds and life insurance
carriers on behalf of persons
 Local estimates based on tabulations
of income tax returns and Census
housing statistics
www.bea.gov
Personal Current Transfer Receipts
 15% of personal income
 Social Security accounts for 1/3
 Includes in-kind transfers such as Medicare
& Medicaid—45% of transfers
 Income maintenance, unemployment
benefits, veterans’ benefits, etc.
 Based on primary data tabulated by
state or county
www.bea.gov
Future Improvements: Personal Income
 Accelerate the release of county
estimates of personal income
 10 months after end of year
 FY 2008 budget initiative to investigate
the feasibility of producing this
www.bea.gov
Future Improvements: GDP Metro
 Gross domestic product for
metropolitan areas
 Prototype estimates released in 2007
 FY 2008 budget initiative to make this
permanent
www.bea.gov
And Finally: Comprehensive Revision
 Spring 2010—every 5 years
 Definitional revisions
 Statistical and methodological revisions
 Presentational revisions
www.bea.gov
Contact Information
Robert L. Brown
Chief, Regional Economic Measurement Division
202-606-9246
[email protected]
www.bea.gov