The NCS sample is selected using a 3-stage stratified design with probability proportional to employment sampling at each stage. The first stage of sample selection is a probability sample of areas, the second stage is a probability sample of establishments within sampled areas, and the third stage of sample selection is a probability sample of jobs within sampled areas and establishments. In stage one, the NCS program is using the Office of Management and Budget area definitions (2003) to define Metropolitan Statistical Areas, Metropolitan Divisions, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States. The area definitions can be found at: www.census.gov/population/www/estimates/metrodef.html.

In the second stage, the sample of establishments is drawn by dividing the sample by industry and ownership. Each sample establishment is selected using a method of sampling called probability proportional to employment size. (See Chapter 8 of the Handbook of Methods.) Use of this technique means that the larger an establishment's employment, the greater its chance of selection.

The third stage of sampling is a probability sample of occupations within a sampled establishment. This step is performed by the field economist during an interview with the respondent using a method called Probability Selection of Occupations (PSO). During this process, the field economist obtains a complete list of employees with each selected employee representing a job within the establishment. As with establishment selection, the selection of a job is based on probability proportional to its size in the establishment. The greater the number of people working in a particular job, the greater the job's chance of selection. The field economist selects a certain number of sample occupations depending on the size of the establishment.

After job selection is complete, the field economist classifies each occupation under its corresponding major occupational group and occupational classification. Currently, NCS uses the 2000 Standard Occupational Classification (SOC) system.

Standard procedures are used to collect and tabulate all NCS data. The methodology and procedures used to estimate vary by product line.

Benefit series have four weight-adjustment factors applied to the data. The first factor is introduced to account for establishment nonresponse. The second factor accounts for occupational nonresponse, and the third factor adjusts for any special situations that have occurred during data collection. The fourth factor, poststratification, also called benchmarking, is introduced to adjust the estimated employment totals to actual counts of employment by industry for the survey reference date. Appropriate employment or establishment totals are used to calculate the proportion, mean, or percentage that is desired.

To measure compensation costs free from the influence of employment shifts among occupations and industries, the ECI is calculated with fixed employment weights unlike the method with which wage series and benefit series are calculated. Since March 2006 estimates, 2002 fixed employment weights from the Bureau's Occupational Employment Statistics survey (OES) program have been used. The ECI is a standard Laspeyres fixed-weighted index.

The ECEC estimates are based on data collected for the ECI. Unlike the ECI, current employment weights are used to calculate cost levels. These weights are derived from two BLS programs: the Quarterly Census of Employment and Wages and the Current Employment Statistics.

**Last Modified Date: **April 11, 2013