Academic journal article Monthly Labor Review

An Evaluation of State Projections of Industry, Occupational Employment

Academic journal article Monthly Labor Review

An Evaluation of State Projections of Industry, Occupational Employment

Article excerpt

An evaluation of State projections of industry, occupational employment

State Employment Security Agencies develop and publish statewide and substate industry and occupational employment projections to help meet the information needs of planners and administrators in vocational education, Job Training Partnership Act programs, educational counseling, private sector training programs, and government economic development agencies. Almost all States now use the Occupational Employment Statistics (OES) program of the Bureau of Labor Statistics for the development of their projections. The methodological core of the Bureau program is the industry-occupational (or staffing pattern) matrix produced for each State from the results of the OES survey and other supplementary data.

Because data from the OES survey first became available in 1976, the State agencies had their first opportunity to develop projections using the OES results for the 1976-82 projection round. This article summarizes the results of an evaluation of the accuracy of those projections for 20 States.1 Based on the evaluation results, we provide some recommendations to improve subsequent rounds of statewide projections.

Evaluation methodology

The basic approach of the analysis was to calculate the projection error by industry and occupation for each State in the sample by comparing the projected 1982 employment levels developed by the respective State agency and the actual 1982 employment levels directly calculated by BLS from State reports. The particular error measure used for each industry or occupation is the adjusted absolute percent error. The average error for various aggregates of industries or occupations is the weighted adjusted mean absolute error.2 Projection errors were calculated for industries and occupations at all levels of detail. The focus, however, was on 3-digit Standard Industrial Classification (SIC) industry sectors and the most detailed occupational categories.3

The evaluation was complicated because many of the 1982 industry employment projections were based on the 1967 SIC coding system, while the actual 1982 industry employment estimates were based on 1972 SIC codes. So that the projected and actual employment data would be comparable, the 1982 industry employment projections were converted to the 1972 SIC code basis using conversion factors calculated from first-quarter 1975, dual-coded data for each State from the Bureau's ES-202 program. But because these conversion factors were more than 10 years old, some error unrelated to the projection error was introduced into the transformed 1982 industry employment projections. To minimize the effect of this spurious error in the evaluation but still retain as many industry sectors as possible to avoid biasing the sample, we deleted all observations for which the difference between the dual-coded employment levels was greater than 15 percent.

To keep the evaluation manageable, other rules were used to reduce the number of observations involved. For industries, a minimum size cutoff of 500 employees in both the base and projection years was used. The final number of 3-digit SIC industries in the 20-State sample was 3,010; the number of 2-digit industries was 1,120. Occupations with fewer than 50 employees in both the base and projection years were deleted. Also, occupations for which there had been definitional changes between the two years were deleted for reasons of noncomparability. For the remaining observations, a stratified sample of occupations was drawn in each State. Each State sample included one subsample of occupations that were common to all of the States. On average, there were about 120 occupations from each State in the evaluation.4

In addition to the procedures and calculations described above, other methods were used for several specific aspects of the evaluation. These are described below, with the respective results. …

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