Economic News Release

Employee Tenure Technical Note

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Technical Note


   The data in this release were collected through a supplement to the
January 2006 Current Population Survey (CPS).  The CPS, which is conducted
by the U.S. Census Bureau for the Bureau of Labor Statistics (BLS), is a
monthly survey of about 60,000 households that provides information on the
labor force status, demographics, and other characteristics of the nation's
civilian noninstitutional population age 16 and over.   
  
   The January 2006 CPS supplement obtained information on worker displace-
ment and workers' tenure with their current employer.  The data on worker 
displacement appear in the BLS news release USDL 06-1454, "Worker Displace-
ment, 2003-05," issued on August 17, 2006.
   
   Information in this release will be made available to sensory-impaired
individuals upon request.  Voice phone:  202-691-5200, TDD message referral
phone number:  1-800-877-8339.
   
Reliability of the estimates
   
   Statistics based on the CPS are subject to both sampling and nonsampling
error.  When a sample, rather than the entire population, is surveyed, there 
is a chance that the sample estimates may differ from the "true" population 
values they represent.  The exact difference, or sampling error, varies de-
pending on the particular sample selected, and this variability is measured 
by the standard error of the estimate.  There is about a 90-percent chance, 
or level of confidence, that an estimate based on a sample will differ by no 
more than 1.6 standard errors from the "true" population value because of 
sampling error.  BLS analyses are generally conducted at the 90-percent level 
of confidence.

   The CPS data also are affected by nonsampling error.  Nonsampling error
can occur for many reasons, including the failure to sample a segment of
the population, inability to obtain information for all respondents in the
sample, inability or unwillingness of respondents to provide correct in-
formation, and errors made in the collection or processing of the data.   

   For a full discussion of the reliability of data from the CPS and in-
formation on estimating standard errors, see the "Explanatory Notes and
Estimates of Error" section of Employment and Earnings.
   
Tenure questions and concepts
   
   In the January 2006 CPS supplement, questions on tenure were asked of all 
employed persons.  The first question was:  "How long has ... been working 
continuously for (fill in name of present employer)?"

                       _____ Days
                       _____ Weeks
                       _____ Months
                       _____ Years

For responses of "1 year" or "2 years," a follow-up question was asked:
"Could you please give the exact number of months?"

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   The purpose of the follow-up question is to obtain more precise infor-
mation on workers who had been with their current employer for a relatively 
short time.  This follow-up question was included for the first time in the 
February 1996 CPS supplement on worker displacement and tenure.  CPS sup-
plements that obtained information on tenure in January of 1983, 1987, and 
1991 did not include the follow-up question.  In those surveys, responses of 
1 year or more could be coded only as the nearest full year, and responses of 
less than a year were coded as the nearest full month.
   
   Prior to January 1983, CPS supplements on tenure asked wage and salary
workers, "When did ... start working at (his/her) present job?"  For wage 
and salary workers, the meaning of the term "job" is ambiguous.  For example, 
a worker who had been employed at a particular company for 10 years and had 
been promoted to a managerial position 1 year prior to the survey may have 
been counted as having 10 years or 1 year of tenure, depending on whether the 
respondent interpreted the question to mean tenure with the current employer 
or tenure in the managerial position.  To rectify this ambiguity, the wording 
of the question was changed in January 1983 to specify the length of time a 
worker had been with his or her current employer.  The change resulted in a 
break in historical comparability, and, for this reason, estimates of tenure 
are not presented in this release for years prior to 1983.

   Data refer to the sole or pricipal job of full- and part-time workers.
All data exclude the incorporated and unincorporated self employed.

   
Interpreting tenure data
   
   Data on tenure have been used as a gauge of employment security, with
some observers regarding increases in tenure as a sign of improving security 
and decreasing tenure as a sign of deteriorating security.  However, there 
are limitations to using the data in this way.  For example, during reces-
sions or other periods of declining job security, median tenure and the pro-
portion of workers with long tenure could rise because less-senior workers 
are more likely to lose their jobs than are workers with longer tenure.  Dur-
ing periods of economic growth, median tenure and the proportion of workers 
with long tenure could fall because more job opportunities are available for 
new entrants to the workforce and experienced workers have more opportunities 
to change employers and take better jobs.  Tenure also could rise under im-
proving economic conditions, however, as fewer layoffs occur and good job 
matches develop between workers and employers.
   
   A changing age distribution among workers would also affect median tenure.  
Since older workers are more likely to have long tenure with their current 
employer than younger workers, aging baby boomers in the workforce would pro-
vide upward pressure on overall median tenure.
 
 
 

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