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Employment Outlook: 2000-2010

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

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Employment Outlook: 2000-2010

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  1. Employment Outlook: 2000-2010 Overview of Methods and Results James C. Franklin Office of Occupational Statistics and Employment ProjectionsDivision of Industry Employment

  2. 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

  3. 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

  4. 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

  5. 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

  6. BLS Projections Specifics • Annual estimates • National level of detail • Medium term -- 10 years • Published every other year

  7. 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

  8. 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

  9. The BLS projections process: Information flows Labor ForceTotal and by age, sex, race, and ethnicity AggregateEconomyGDP, total employment, andmajor demand categories Population, labor force participation rate trends, category restraints Demographic, fiscal policy, foreign economies, energy prices, monetary policy OccupationalDemandIndustry staffing patterns Industry FinalDemandsales to consumers, businesses,and government Staffing pattern ratio analysis, industry-specific studies, staff expertise Economic censuses, annual economic surveys, other data sources Industry output, sector wage rates, technological change BEA benchmark-year input-output tables, BLS time-series estimates IndustryEmploymentLabor productivity, averageweekly hours, w&s employment Industry Output Use and make relationships, total requirements tables

  10. 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

  11. 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

  12. 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

  13. 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

  14. Aggregate Economy--Key Assumptions • Demographic • Fiscal policy • Foreign economic activity and inflation • Energy • Monetary policy

  15. Aggregate Economy--Key Results • Real GDP, level & rate of growth • Aggregate employment, by household & establishment

  16. 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

  17. 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

  18. 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

  19. 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

  20. Interindustry Relationships Industry Use Table Direct Requirements Total Requirements ä ä Y ä Market Shares ä Make Table Total Requirements ä ä X Commodity q = Xe g = Ye where: e = final demand vector q = commodity output g = industry output

  21. 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

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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

  27. 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

  28. Reviewing the Projections • Initial estimates are reviewed internally by the entire staff of OEP, resulting in bottom-up feedback to each stage of the process. This process has proven to be: • Analytical rather than mechanical • Cost-effective • Pragmatic

  29. Reviewing the Projections • Secondary review involves other program offices within the BLS: • Employment & Unemployment Statistics • Productivity & Technology • Commissioner of BLS

  30. 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

  31. Employment Outlook: 2000-2010 • Labor force • Economic growth • Industry employment • Occupational employment

  32. Population and labor force will continue to grow Millions Population Labor force projected projected Source: Bureau of Labor Statistics

  33. Labor force growth will remain steady Percent change Population Labor force projected projected Source: Bureau of Labor Statistics

  34. Employment Outlook: 2000-2010 • Labor force • Economic growth • Industry employment • Occupational employment

  35. A healthy economy is projected through 2010 Selected economic variables, annual growth rates GDP Productivity 1980-1990 1990-2000 2000-2010, Projected 1980-1990 1990-2000 2000-2010, Projected Source: Bureau of Labor Statistics

  36. The 2000-2010 projections assume a 4 percent unemployment rate Percent Unemployment 1990 2000 2010, assumed Source: Bureau of Labor Statistics

  37. Personal consumption expenditures (PCE) account for most of GDP Percent Imports PCE Exports Investment Government Source: Bureau of Labor Statistics

  38. Employment Outlook: 2000-2010 • Labor force • Economic growth • Industry employment • Occupational employment

  39. Service-producing industries continue to lead employment growth Millions of nonfarm wage and salary jobs Goods-producing Service-producing Source: Bureau of Labor Statistics

  40. Services and retail trade account for most job growth Thousands of nonfarm wage and salary jobs, projected 2000-2010 Service Producing Goods Producing Source: Bureau of Labor Statistics

  41. Total: 12,893 Business Health services services 2,838 5,064 2,505 1,260 1,225 All other Engineering services and management Social services services Projected 2000-2010 employment growth in services is concentrated Thousands of nonfarm wage and salary jobs Source: Bureau of Labor Statistics

  42. Computer and data processing Residential care Health services, nec. Cable and pay television Personnel supply Warehousing and storage Water and sanitation Veterinary Landscaping and horticulture Miscellaneous business The 10 fastest growing industries are service-producing Percent change, projected 2000-2010 Source: Bureau of Labor Statistics

  43. Personnel supply services Computer and data processing services Retail trade, except eating and drinking places Eating and drinking places Offices of health practitioners State and local government education Miscellaneous business services Construction Eight industries account for half of projected 2000-2010 job growth Thousands of wage and salary jobs Source: Bureau of Labor Statistics

  44. Employment Outlook: 2000-2010 • Labor force • Economic growth • Industry employment • Occupational employment

  45. Professional and related occupations had the most jobs in 2000 Millions of jobs Source: Bureau of Labor Statistics

  46. All major occupational groups are projected to increase Percent change, projected 2000-2010 Source: Bureau of Labor Statistics

  47. Professional occupations account for more than 3 out of 10 new jobs Thousands of jobs, projected 2000-2010 Total: 22,160 Source: Bureau of Labor Statistics

  48. Job openings from replacement needs exceed those from employment growth Millions of jobs, projected 2000-2010 13.5 12.2 7.7 6.7 5.1 4.0 3.9 2.5 1.9 0.5 Source: Bureau of Labor Statistics

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