BLS Occupational Employment Projections to 2008
Grove, C. Brian, Parker, Robert P., Business Economics
It is important for business economists to know the strengths and limitations of the data that they use in their work. This note describes the methods used by BLS to make long-run projections of employment by occupation.
This article is based on material provided by Richard M. Devens, Jr., and Chester Levine of the U. S. Bureau of Labor Statistics.
Last November, the Bureau of Labor Statistics (BLS) released new projections of the American economy, labor force, industrial employment, and occupational structure through 2008.  These projections were presented in the November 1999 Monthly Labor Review [less than]www.bls.gov/opub/mlr/1999/11/contents.btm[greater than] and are also available on the BLS website [less than]stats.bls.gov/emphome.htm. The projections, which are prepared every other year, reflect the work of the Bureau's Office of Employment Projections and the input of knowledgeable people from other offices in the Bureau, other government agencies, colleges and universities, industries, unions, professional societies, and trade associations. These groups furnished data and information, prepared reports, or reviewed the projections.
BLS develops the projections in a series of steps described below. Each step is based on separate projection procedures, models, and related assumptions. Each component of the projection is developed in order, with the results of each used as input for successive components and with some results feeding back to earlier steps. Each step is repeated a number of times to ensure internal consistency as assumptions and results are reviewed and revised.
Composition of the Labor Force
The Bureau of Labor Statistics makes projections for 128 age, sex, race, or Hispanic-origin labor force categories. The projection methodology combines population projections made by the Census Bureau and BLS labor force participation rate projections. Projections of these participation rates are developed for each category by first estimating a trend rate of change, usually based on participation rate behavior during the previous eight years. The participation rate estimate may be modified when the time-series projections for the specific group appear inconsistent with the results of cross-sectional and cohort analyses.
Growth and Composition of the Aggregate Economy
The projections of the labor force and assumptions about other demographic variables, fiscal policy, foreign economic activity, and energy prices and availability form the input to a macroeconomic model. This model projects GDP (sales to all final consuming sectors in the economy) and the distribution of GDP by its major expenditure components (consumer expenditures, private investment, government spending, and net exports). Recent projections have been based on a macroeconomic model developed by Data Resources, Inc. This model has approximately 340 behavioral equations that represent the key relationships influencing the growth and composition of the U.S. economy. BLS specifies a set of nearly 300 exogenous variables that, together with the structure of the model, define a particular growth scenario for the U.S. economy. The projections for 1998-2008 anticipate moderate growth, continued low inflation, and a relatively stable labor market.
Interindustry Relationships and Industry Output
Estimating the intermediate flows of goods and services--for example, the steel incorporated into automobiles--is the next step in the projection process. For the industry output projections, the economy is disaggregated into approximately 180 sectors, encompassing all U.S. economic activity, both public and private. The exact number of sectors may vary from one projection study to the next, depending on data availability.
The input-output accounts of the United States, which provide detailed information on commodity purchases, both by final consumers and intermediate users, provide the framework for this procedure. …