Puerto Rico labor survey methods to undergo overhaul

Written by  //  February 21, 2014  //  Labor/HR  //  1 Comment

From left: Mario Marazzi and José Piña

From left: Mario Marazzi and José Piña

The U.S. Bureau of Labor Statistics and the Puerto Rico Institute of Statistics announced Thursday a series of changes to the methodology used to create Puerto Rico’s labor surveys, to align them with what is done and is available stateside and in most developed countries, officials for both agencies said.

The main improvements include transitioning the labor force survey toward a new sampling based on the Census 2010 results, developing alternate indicators for labor underutilization, and using digital maps to segment household blocks.

“The updated sample will incorporate housing units built during the decade, which will improve sample representativeness,” said Statistics Institute Executive Director Mario Marazzi.

Meanwhile, changes to the payroll employment survey include swapping the quota sample for more probabilities-based estimates, establishing confidence intervals for the survey, and implementing a model of “birth and death” of companies, among other elements.

“Methodologies at the federal and international levels are constantly evolving. Puerto Rico has always been behind in this evolution,” said Marazzi. “This time, the methodological review of the labor force survey sample is being conducted at the same time as the corresponding survey in the United States.”

In Puerto Rico, the revisions are happening about 10 years after they went into effect in the U.S., he said.

“In fact, the quota sample used until recently appears to have exhausted its useful life, which may explain the size of the expected improvement of up to 25,000 jobs as articulated by an economist at the Federal Reserve Bank of New York last week,” he said, referring to an article written by Jason Bram, a research officer at the Fed’s research and statistics group.

As provided by the U.S. Bureau of Labor Statistics, February is usually the month to make improvements to the survey methodologies, which cause delays in the publication of regular monthly reports that would otherwise be published in February or early March.

By April 2014, the local Labor Department plans to begin phasing into the new household sample, Marazzi said.

“This is a process that doesn’t happen from one day to the next, you need to transition into it,” Marazzi said, noting that information is to be phased in over 16 months. “We’ll be starting the process at about the same time as in the U.S., rather than one or two years after as it happened in the past. In this case, we’ve given this a lot of thought and attention to get it to happen this year.”

By the end of this fiscal year, the local Labor Department should also be integrating the alternative indicators for labor underutilization. Next year, the Statistics Institute and the Labor Department will begin working on revising the questionnaire used for the surveys, to make it more of a script so that responses are uniform, Marazzi said.

José Piña, economist with the BLS, said all of these changes will not “change the game, but rather provide a better way of estimating and bringing Puerto Rico up to the standards used in the U.S. and the international community.”

“Puerto Rico will finally have the ability to have reliability measures about which we can say ‘this change is statistically significant’,” he said.

The changes being effected to the Labor Department statistic methodologies are being financed with a $250,000 legislative assignment to the Statistics Institute, which has used about $50,000 of the money so far. Furthermore, the BLS has committed $85,000 a year to the island for the past five years for this type of work, said Christopher Manning, chief of the BLS’s division of employment statistics and area division.

  • Kenneth McClintock

    This project proves that the Statistics Institute is an agency that Puerto Rico’s economy truly needs. What is being phased in here now was was phased in thgroughout the states 10 years ago but the Federal government had not gotten around to extending it to PR until recently. Such inequality, such tardiness has done significant indirect damage to our economy’s ability to compete for jobs with those of the states, a damage we’ll probably never be able to quantify but simply imagine.