The Impact of Trade Adjustment Assistance (TAA) Benefits on Workers, and Assessing LEHD Successor-Predecessor Linkages with Researcher-Provided Data on Mass Layoffs

The Census Bureau's Successor-Predecessor Files (SPF) are critical for researchers interested in identifying whether worker transitions between establishments emanate from separations, or are rather due to administrative changes such as reorganizations, mergers, and acquisitions, in which the worker remains employed at the original establishment. This technical memorandum uses researcher-provided data from the USDOL Trade Adjustment Assistance program to evaluate the validity and potential shortcomings of the prevailing “UI-identified†cluster flow method in the SPF (Benedetto et al. (2004)). Linking LEHD establishments to known instances of mass layoffs, plant bankruptcies, and rare information on whether the establishment used leased workers from payroll firms and temp agencies, we make three contributions: (1) We demonstrate that while the “80% heuristics†developed in Benedetto et al. (2004) perform relatively well, they miss important bankruptcy-induced reorganizations in which 80% of predecessor workers are unlikely to be employed altogether, let alone at a successor plant, generating false negatives among remaining attached workers. (2) The 80% heuristic performs particularly poorly in the presence of leased workers. Workers returning to their payroll firm do not necessarily constitute establishment continuity or reorganizations; tagging them as such may generate false positives. (3) We show that a further category of reorganization could be tagged if the SPF were expanded to measure linkages across states but within EIN: i.e. relocations. An unintended by-product of this work is also the identification of important shortcomings in many observations in the Geocoded Address List (GAL), which is also discussed.