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Description of QWI confidentiality protection methods

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A paper by Abowd, Stephens and Vilhuber (2005), and the corresponding presentation at JSM2005, describe the confidentiality protection methods used for the Quarterly Workforce Indicators (QWI). The paper was presented in session 431 of the Joint Statistical Meetings 2005, in Minneapolis, MN on August 10.
The Quarterly Workforce Indicators are new estimates developed by the Census Bureau's Longitudinal Employer-Household Dynamics Program (LEHD) as a part of its Local Employment Dynamics partnership with 37 state Labor Market Information offices. These data provide detailed quarterly statistics on employment, accessions, layoffs, hires, separations, full-quarter employment (and related flows), job creations, job destructions, and earnings (for flow and stock categories of workers). The data are released for NAICS industries (and 4-digit SICs) at the county, workforce investment board, and metropolitan area levels of geography. The confidential microdata -- unemployment insurance wage records, ES-202 establishment employment, and Title 13 demographic and economic information -- are protected using a permanent multiplicative noise distortion factor. This factor distorts all input sums, counts, differences and ratios. The released statistics are analytically valid -- measures are unbiased and time series properties are preserved. The confidentiality protection is manifested in the release of some statistics that are flagged as "significantly distorted to preserve confidentiality." These statistics differ from the undistorted statistics by a significant proportion. Even for the significantly distorted statistics, the data remain analytically valid for time series properties. The released data can be aggregated; however, published aggregates are less distorted than custom postrelease aggregates. In addition to the multiplicative noise distortion, confidentiality protection is provided by the estimation process for the QWI, which multiply imputes all missing data (including missing establishment, given UI account, in the UI wage record data) and dynamically re-weights the establishment data to provide state-level comparability with the BLS's Quarterly Census of Employment and Wages.

The paper and presentation can be downloaded here.