Volume 8, No. 1
Spring 2002

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The Longitudinal Linked Database

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THE LONGITUDINAL LINKED DATABASE:
A New Tool for Measuring The Impact of Layoffs at State & Local Levels

by Rich Reinhold

What is the LLD?

The LLD is a reporting system that tracks the employment status and earnings of displaced workers, as well as other groups. The system was developed by the State of North Carolina but is now operational in a number of states, including Illinois. Employment and earnings are based on linkages among data from the Unemployment Insurance (UI) system, including: initial claims for unemployment benefits, quarterly wage records, establishment records and applicant records from the State Job Service. Other sources can be utilized in the LLD, depending on their availability, such as client records from job training, welfare to work or local community college programs. The current version of LLD permits the tracking of four different cohorts including: claimants reported in the Mass Layoff Statistics (MLS) program (discussed below), all UI claimants, clients of State Human Services and business establishments covered by UI. Characteristics of individuals are reported using linkages among the Social Security Numbers within each of the relevant data sources. Business establishment characteristics are reported using linkages among employer identification numbers, industry codes and county geographic codes.

How can data from the LLD be used?

The LLD has numerous applications, but here are just a few of them. Job training professionals can evaluate re-employment services by analyzing post-layoff employment and earnings outcomes. The business community can use output from the LLD to learn what industries are declining and the characteristics of potential labor supply. Economists can measure the strength of the labor market by tracking re-employment by industry or geography. Local governments and Workforce Investment Boards can find out what percentage of workers displaced in the tourism and travel industry following September 11th found new jobs and at what earnings level. Labor organizations can use the LLD to obtain data on the employment status, earnings and industry of re-employment for members displaced by layoffs and plant closures.

What is the MLS program?

The MLS program identifies, describes and tracks large job cutbacks by employers. A mass layoff is defined as a layoff involving at least 50 workers and lasting more than 30 days. Employers are identified as having potential mass layoffs if at least 50 initial claims for unemployment benefits are filed against them within a five consecutive week period. Once identified, employers are contacted by phone to gather information not available from UI administrative records, including the total number of workers laid off, the date the layoff began/ended, the pre-layoff employment, the reason for the layoff, worker recall plans and the open/closed status of the establishment. In short, the MLS part of LLD ties together the employer supplied layoff data described above with administrative data accumulated in the UI system.

Post-Layoff Employment and Earnings

In this section, we will discuss the 2000 employment and earnings outcomes of displaced workers in Illinois generated from the MLS part of the LLD. We chose 2000 because there were at least four quarters of post-layoff wage records for each of the quarters in 2000. The four-quarter post-layoff window provides a sufficient time period for displaced workers to exhaust severance pay and UI benefits and search for new employment. It is important to note that the data only include displaced workers who filed for UI benefits and were reported in MLS.

The earnings data cited are quarterly averages based on wage records that are submitted by employers. The wage records include earnings from both full and part time employment. The number of hours worked are not reported in wage records.

Also, for the purpose of this discussion, we excluded claimants who were laid off due to seasonal reasons. Workers displaced for seasonal reasons tend to be laid off during the same time each year and are quite often recalled by the separating employer. The exclusion of seasonal workers dropped the UI claims total to about 47,500, or about 56 percent of all claimants reported in MLS in 2000. Here are some of the findings from our analysis. The table below is referenced throughout the discussion.

• Seventy-six percent of all workers included in this analysis were employed four quarters after being displaced. The remaining 24 percent of workers were either unemployed, employed in jobs not covered by UI, working for an employer located outside Illinois or out of the labor force (e.g. attending school, retired). An average of 94 percent of pre-layoff earnings was replaced among those who were re-employed four quarters after being laid off.
  
  
• Men were re-employed in slightly higher percentages than women but both men and women replaced about the same percentage of pre-layoff earnings. Also, women had an average of 62 percent of men’s pre and post layoff earnings.
  
  
• Younger workers fared better than older workers (age 55 and above) did in finding employment and replacing lost earnings. The reemployment rate for the bulk of the workers (ages 30-54) was roughly the same. But only about two-thirds of those ages 55 and older were employed four quarters after being laid off. This same age group had the lowest earnings replacement rate. One should keep in mind that many of the oldest displaced workers probably chose to retire rather than reenter the labor market. Finally, the youngest workers (less than 30 years old) had the highest earnings replacement but they also had the lowest pre-layoff earnings.
  
  
• Among the major racial groups, White workers had the highest pre- and post-layoff earnings as well as the highest re-employment and earnings replacement rates. By comparison, Black, Hispanic and Asian workers had about the same re-employment and earnings replacement percentages but different levels of pre- and post-layoff earnings.
  
  
• There were large differences between the re-employment and earnings status of workers who did and did not exhaust unemployment benefits. More than 80 percent of claimants who did not exhaust UI benefits were employed four quarters after being laid off as compared with 58 percent of UI benefits exhaustees. Non-UI exhaustees replaced almost all of their pre-layoff earnings while exhaustees replaced less than two-thirds of their earnings.
  
  
• Workers formerly employed in Wholesale Trade and Construction had the highest re-employment rates, while those laid off in Retail Trade and Public Administration fared the worst. The lowest earnings replacement was found in Transportation-Public Utilities while the highest earnings replacement was in Services.
  
  
• Unlike workers in other industries, most workers formerly employed in Construction and Manufacturing found jobs in their same industry within four quarters of being laid off. In contrast, 28 percent of workers laid off in the Finance-Insurance-Real Estate sector found new jobs in the Service sector but replaced just 68 percent of their pre-layoff earnings. However, 33 percent of workers who were laid off in the Finance-Insurance-Real Estate industry were re-employed in that same industry, replacing 100 percent of their pre-layoff earnings.

Finally, here are some questions and answers that may address issues not discussed earlier:

Q: Can the LLD create reports for geographic areas below the State level?

A: Yes, the LLD can report post-layoff employment and wages by sub-State region, including metropolitan areas, individual counties and multi-county administrative regions, such as Workforce Investment Areas.

Q: Can the LLD create reports that include multiple characteristics?

A: Yes, the LLD can produce reports that combine up to three data elements, such as industry and gender or industry, race and age.

Q: Can the LLD create reports below major industry levels?

A: Yes, the LLD can generate reports for industries using 2 digit level Standard Industrial Classification (SIC) codes. For example, within Manufacturing, we can generate reports for Fabricated Metal Products or, within Transportation-Public Utilities, we can create reports for Transportation by Air.

Q: Can we obtain LLD reports for individual companies?

A: No, state and federal law prohibits us from releasing any data that would disclose the identity of individual businesses. The data that are available to the public are summarized by variables such as geography, industry or socioeconomic characteristics.

Q: How can I obtain LLD reports?

A: LLD reports can be obtained (free of charge) in two ways. A limited number of standard LLD reports are available on-line at the LMI Source Web site at http://lmi.ides.state.il.us/mls/mls.htm. You can also request standard or custom reports by phone, fax or e-mail. The reports can be e-mailed to you in Excel or Word.