Transcript Bureau of Labor Statistics Employment Projections

Employment Outlook: 2000-2010
Overview of Methods and Results
James C. Franklin
Office of Occupational Statistics
and Employment Projections
Division of Industry Employment
The BLS Projections Program

Develop long term projections of labor
market information
– labor force trends by sex, race or Hispanic
origin, and age
– employment trends by industry and
occupation
The BLS Projections Program
Assess implications for employment
opportunities
 Assess effects of changes in Federal
programs and policies
 Disseminate findings to aid

– career planning
– education planning
– policy formulation
The BLS Projections Program

The projections are published in a wide
variety of formats for varied audiences:
– Occupational Outlook Handbook
– Monthly Labor Review articles
– Occupation Outlook Quarterly articles
– Special analysis bulletins
Who Uses the BLS Projections

Career counselors and students

Government agencies

Private consulting and research firms

Academic economists in U.S. and
abroad

Politicians and the Media
BLS Projections Specifics

Annual estimates

National level of detail

Medium term -- 10 years

Published every other year
Requirements for carrying out this type
of projections
Large-scale economic data base
 Extensive computer support

– Statistical analysis capabilities
– Data base management capabilities

An experienced staff
The BLS Projections Process:
Component Models
Labor force
 Macro economic activity
 Input-Output model and derivation of
industry output
 Labor model
 Occupational staffing pattern model

The BLS projections process:
Information flows
Aggregate
Economy
Labor Force
Total and by age, sex, race,
and ethnicity
Occupational
Demand
Industry staffing patterns
Industry
Employment
Labor productivity, average
weekly hours, w&s employment
GDP, total employment, and
major demand categories
Population, labor force
participation rate
trends, category
restraints
Demographic, fiscal
policy, foreign
economies, energy
prices, monetary
policy
Staffing pattern ratio
analysis, industryspecific studies, staff
expertise
Economic censuses,
annual economic
surveys, other data
sources
Industry output, sector
wage rates,
technological change
BEA benchmarkyear input-output
tables, BLS timeseries estimates
Industry Final
Demand
sales to consumers, businesses,
and government
Industry Output
Use and make relationships,
total requirements tables
The Labor Force--What Is It

The labor force is comprised of those
age 16 and over who:
– are working at full- or part-time jobs, or
– are unemployed but are actively seeking
work

Labor force participation rate:
– labor force / noninstitutional population
The Labor Force--How it is Projected




Use Census forecasts of population by age,
sex, race, and ethnicity
Calculate historical labor force participation
rates
Extrapolate these rates to the target year
Multiply the projected rates by population to
calculate the projected labor force of each
category
The Labor Force--What is Projected

By Age -- sixteen groups

By Sex

By Race and Ethnicity
–
–
–
–
–
White non-Hispanic
White Hispanic
Black non-Hispanic
Black Hispanic
Asian and other
Aggregate Economy--How We Project

DRI Comprehensive Quarterly Model
– 1000+ behavioral & identity relationships
– 280+ exogenous assumptions

Assumptions are provided to the model

Model is solved over the forecast period
Aggregate Economy--Key Assumptions
Demographic
 Fiscal policy
 Foreign economic activity and inflation
 Energy
 Monetary policy

Aggregate Economy--Key Results

Real GDP, level & rate of growth

Aggregate employment, by household
& establishment
Aggregate Economy--Key Results

Major demand components of GDP
– Personal consumption expenditures
– Producers’ durable equipment
– Nonresidential construction
– Residential construction
– Change in business inventories
– Exports of goods & services
– Imports of goods & services
– Government purchases
Aggregate Economy--Evaluation
Factors






GDP rate of growth
Civilian unemployment rate
Labor productivity growth rate
Inflation
Federal budget deficit/surplus
Foreign trade deficit/surplus
Are the results meaningful?
Are they consistent with the assumptions?
If not, rethink the assumptions and try again
Why BLS no longer produces High and Low
alternatives to the projections
Users were confused: which one was
the right one for their use?
 Wrongly interpreted as being
confidence intervals
 Alternative development implied a
sensitivity analysis of macro results
 So now BLS makes a separate macro
sensitivity analysis

Industry Demand--What is Projected

Commodity final demand
– First disaggregate GDP demand
components by product class
– Then, within each class, determine the
commodity content (192 commodities)
– Result: detailed final demand bills-of-goods
Interindustry Relationships
Industry
Use
Table
Make
Table

Direct
Requirements

Market
Shares

Total
Requirements

Total
Requirements
Commodity
q = Xe
where:
g = Ye
e = final demand vector
q = commodity output
g = industry output
Y
X
Industry Demand--What is Projected

Total requirements coefficients
– Scale rows to affect product sales
coefficients across all industries
– Modify columns to affect changes in material
input requirements for specific industries

Recalculate industry & commodity total
requirements tables
Industry Demand--What is Projected

Combining the estimates of intermediate
and final demand results in the total
output by industry and commodity
necessary to produce a specific level of
GDP

Industry output (rather than final
demand) is the key determinant of
employment needs
Projecting Industry Employment

Total hours for each industry derived as:
Hi = (time, outputi, real wagej)

Average annual hours are well-behaved:
AAHi = g(time, UR)

Industry employment determined by identity:
Ei = Hi / AAHi

Initially controlled to aggregate employment control
from macroeconomic model
Occupational Demand--What

Industry by occupation staffing pattern
matrix:
– 260 industries
– 513 occupations

Distributes wage & salary employment
in each industry to all occupations used
by that industry
Occupational Demand--What

A separately determined distribution of
self-employed and unpaid family workers
by occupation completes the picture of
occupational demand in the economy

Each occupation then assigned to a
growth category
Occupational Demand--How

Staffing patterns are assembled from
historical data then modified based on
various factors:
– Technological changes
– Changing business practices
– Changes in industry activity
Replacement Demand

Total job openings made up of:
– new jobs created
– replacement needs for those who have
•
•
•

died
retired
moved to another occupation
Replacement needs often outweigh
new job creation as a source of job
growth
Reviewing the Projections

Initial estimates are reviewed internally by
the entire staff of OEP, resulting in bottomup feedback to each stage of the process.
This process has proven to be:
– Analytical rather than mechanical
– Cost-effective
– Pragmatic
Reviewing the Projections

Secondary review involves other
program offices within the BLS:
– Employment & Unemployment
Statistics
– Productivity & Technology
– Commissioner of BLS
Reviewing the Projections

Result: a consistent set of projections at
all levels of detail that has undergone
extensive scrutiny by all analysts in the
Office, as well as detailed review by
other BLS offices

Sensitivity analyses allow the user to
evaluate major assumptions
Employment Outlook: 2000-2010
Labor force
 Economic growth
 Industry employment
 Occupational employment

Population and labor force will continue
to grow
Millions
234
210
189
158
141
126
Population
1990
2000
Source: Bureau of Labor Statistics
2010,
projected
Labor force
1990
2000
2010,
projected
Labor force growth will remain steady
Percent change
10.9
11.4
11.9
12.0
Population
Labor force
1990-2000 2000-2010,
projected
1990-2000 2000-2010,
projected
Source: Bureau of Labor Statistics
Employment Outlook: 2000-2010
Labor force
 Economic growth
 Industry employment
 Occupational employment

A healthy economy is projected through
2010
Selected economic variables, annual growth rates
3.2
3.2
3.4
2.8
2.0
1.5
GDP
1980-1990 1990-2000 2000-2010,
Projected
Source: Bureau of Labor Statistics
Productivity
1980-1990 1990-2000
2000-2010,
Projected
The 2000-2010 projections assume a 4
percent unemployment rate
Percent
5.6
4.0
4.0
Unemployment
1990
Source: Bureau of Labor Statistics
2000
2010,
assumed
Personal consumption expenditures
(PCE) account for most of GDP
Percent
1990
67 68 69
Imports
PCE
2000
9 12
19
Exports
-9
-17
-26
Source: Bureau of Labor Statistics
2010
14
19 23
21 17
15
Investment Government
Employment Outlook: 2000-2010
Labor force
 Economic growth
 Industry employment
 Occupational employment

Service-producing industries continue
to lead employment growth
Millions of nonfarm wage and salary jobs
125
105
84
25
26
27
Goods-producing
1990
2000
Source: Bureau of Labor Statistics
2010
Service-producing
1990
2000
2010
Services and retail trade account for
most job growth
Thousands of nonfarm wage and salary jobs, projected 2000-2010
12,893
Services
3,093
Retail trade
1,757
Government
Transportation and utilities
1,255
Wholesale trade
776
Finance
687
Construction
825
Manufacturing
577
Service Producing
Goods Producing
Mining
Source: Bureau of Labor Statistics
-55
Projected 2000-2010 employment
growth in services is concentrated
Thousands of nonfarm wage and salary jobs
Total: 12,893
Business
services
Health
services
2,838
5,064
2,505
All other
services
1,260
1,225
Social
services
Source: Bureau of Labor Statistics
Engineering
and management
services
The 10 fastest growing industries are
service-producing
Percent change, projected 2000-2010
86
Computer and data processing
64
Residential care
57
Health services, nec.
51
49
Cable and pay television
Personnel supply
Warehousing and storage
45
Water and sanitation
45
Veterinary
45
Landscaping and horticulture
44
Miscellaneous business
44
Source: Bureau of Labor Statistics
Eight industries account for half of
projected 2000-2010 job growth
Thousands of wage and salary jobs
1,913
Personnel supply services
1,805
Computer and data processing services
1,606
Retail trade, except eating and drinking places
1,486
Eating and drinking places
1,245
Offices of health practitioners
State and local government education
1,004
Miscellaneous business services
Construction
Source: Bureau of Labor Statistics
1,076
825
Employment Outlook: 2000-2010
Labor force
 Economic growth
 Industry employment
 Occupational employment

Professional and related occupations
had the most jobs in 2000
Millions of jobs
27
Professional and related
26
Service
24
Office and administrative support
Management, business, and financial
16
Sales and related
16
13
Production
10
Transportation and material moving
7
Construction and extraction
6
Installation, maintenance, and repair
Farming, fishing, and forestry
Source: Bureau of Labor Statistics
1
All major occupational groups are
projected to increase
Percent change, projected 2000-2010
26
Professional and related
20
Service
15
Transportation and material moving
14
13
Management, business, and financial
Construction and extraction
12
Sales and related
11
Installation, maintenance, and repair
9
Office and administrative support
6
Production
Farming, fishing, and forestry
Total, all occupations
Source: Bureau of Labor Statistics
4
15
Professional occupations account for
more than 3 out of 10 new jobs
Thousands of jobs, projected 2000-2010
6,952
Professional and related
5,088
Service
Office and administrative support
2,171
Management, business, and financial
2,115
1,852
Sales and related
1,530
Transportation and material moving
989
Construction and extraction
Production
750
Installation, maintenance, and repair
662
Farming, fishing, and forestry
51
Total: 22,160
Source: Bureau of Labor Statistics
Job openings from replacement needs exceed
those from employment growth
Millions of jobs, projected 2000-2010
Service
5.1
Professional and related
8.4
7.0
Office and administrative support 2.2
3.0
Transportation and material moving 1.6
2.4
3.1
Construction and extraction 1.0 1.5 2.5
Installation, maintenance, and repair .7 1.2
Farming, fishing, and forestry
Source: Bureau of Labor Statistics
6.7
4.8
Management, business, and financial 2.1
0.5
1.9
12.2
7.7
5.5
Sales and related 1.9
Production .8
5.2
13.5
5.1
4.0
3.9
Change in employment
Net replacement needs