Several strategies can help to address technical limitations in unemployment insurance wage records.
Coverage. Although most types of employment are covered, self-employment and employment in the federal government and military are not. Currently, self-employment is a very small component of all employment, particularly among former welfare recipients, but this segment is likely to grow with the increasing use of contingent workers and independent contractors. Federal and military employment is more of an issue in certain parts of the nation. Affected states need to work out a mutually convenient strategy with the Office of Personnel Management to obtain data on nonmilitary federal employment and with the postal service and military branches for employment in these sectors.
Interstate Data Sharing. Although information on employment in other states is not included in a state's unemployment insurance records, many states have formal and ad hoc data-sharing agreements. States in the Northwest have a formal agreement among themselves, and twenty-six states have interstate data-sharing agreements through the Information Technology Support Center operated by Lockheed Martin in Maryland. The National New Hire Directory established as part of the child support enforcement system may enable states to check employment in other states. However, protocols for accessing this data for research purposes have not yet been developed.
Employment and Wages. Wage records provide information on employment and total earnings during a quarter. However, because no information is provided on the date of hire, it is impossible to determine the wages paid per hour or the amount of time a person worked during the quarter. The National New Hire Directory now provides information on the planned date of hire that can be matched with unemployment insurance wage records. States interested in obtaining information on the location of the worksite may need to receive authority from their state legislature to do so. Currently, Minnesota collects worksite information on its wage records and Missouri is considering collecting this information. The employer address in the National New Hire Directory is not necessarily that of the worksite.
Seasonal Fluctuations. It is best to use third-quarter data, or, if necessary, second-quarter data to avoid measuring inflated quarterly earnings because of end-of-year bonuses.
Maintaining Access Over Time. Such files as unemployment insurance records are often "dumped" or archived after a certain period. Consequently, files must be preserved or new shadow files created if they are to be easily accessed over time.