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Bain's jobs data: Under lock and key

January 12, 2012: 12:40 PM ET

It turns out there is a way to determine how many jobs Mitt Romney helped to create or destroy while running Bain Capital. Unfortunately, we aren't allowed to do it.

A handful of academics – including Harvard's Josh Lerner and the University of Chicago's Steve Davis – last year published a working paper titled Private Equity and Employment. It basically defied conventional wisdom on both sides, arguing that private equity investment only has "a modest net impact on employment."

To arrive at that conclusion, the researchers constructed a dataset that relied on U.S. Census Bureau's Longitudinal Business Database (which is derived from IRS records). It then used Capital IQ and other financial sources to match up the LBD employment records with thousands of private equity transactions. In other words, while Bain Capital and other PE firms didn't keep track of their portfolio payroll data, the government did. And some academics connected the dots.

Unfortunately, it seems that access to the LBD is highly conditional. Lerner and Davis were required to use the data only in the aggregate, promising not to report any identifying information about any specific organization – even if that organization was not specifically included in the LBD (i.e., financial sponsors). In fact, Census and the IRS screen all such working papers before they can be released, in order to make sure no identifying data is disclosed.

And, since neither Lerner nor Davis seems interested in going to jail, we remain unable to specifically determine the jobs record of Bain or any other PE firm.

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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