Transcript Tracking Personal Income for Metropolitan Areas

BEA’s State and Local Area
Personal Income
Robert L. Brown
Navigating the Nevada Economy
Reno, NV
September 29, 2009
www.bea.gov
BEA 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
BEA Regional Personal Income
▪ Consistent time series with BEA national
statistics
▪ Timely
 State—3 months
 Metro—8 months
 County—12-16 months
▪ Industrial structure of earnings and
compensation
www.bea.gov
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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 released 8 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
366 Metropolitan Areas
574 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 by county available 16 month after
end of year
www.bea.gov
BEA Income is a Dynamic Series
▪ Personal income has changed to better
reflect the ever-changing economy
 Definitional and classificational changes
 Source data and methodological changes
 Presentational changes
www.bea.gov
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Regional Income First Produced
▪ 1940—”Income Payments to Individuals, by
States, 1929-38”
 Income payments to individuals for services
rendered in current production
 An attempt to measure product
▪ Income payments definition—4 components:
 Salaries and wages
 Other labor income
 Direct and work relief and unemployment benefits,
workmen’s compensation, pension payments, and related
items
 Entrepreneurial withdrawals
 Income of self-employed persons
 Dividends, interest, and net rents and royalties
www.bea.gov
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State and Local Area
Personal Income
▪ State personal income first published in Survey of
Current Business in 1955
▪ 6 Major Components
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Wages and Salaries
Other Labor Income
Proprietors’ Income
Property Income
Transfer Payments
Less: Personal Contributions for Social Insurance
▪ Local area personal income first published in 1975
▪ Consistent with the integrated national economic
accounts
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8
State and Local Area Personal
Income—What Has Changed?
▪ More component detail
▪ Broader range of income-in-kind and imputed
income items
▪ Now includes income of nonprofit institutions
serving individuals
▪ Now includes employer contributions to
private pension funds
 Instead of benefits
▪ New component—transfer payments
 Government payments to individuals
www.bea.gov
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Continued Improvements
▪ Detail continues to expand
 Compensation by industry in 2005
 Dividends, interest, and rent detail in
2009/10
▪ Definitions continue to be updated
 Treatment of Medicare prescription drugs
 Treatment of Economic Stimulus payments
▪ New source data and methods continue
to be developed and used
www.bea.gov
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Key local area statistics
▪ Total personal income
 All income received by residents
▪ Per capita personal income
 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
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%
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%)
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Wages and Supplements
United States
www.bea.gov
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
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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
▪
<0.5% of personal income nationally
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▪
Nevada
 Carson City
 Douglas
 Washoe
-0.6%
-13.4%
10.5%
-1.4%
Inter-county commuters

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
www.bea.gov
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