Proposed Changes to BLS Replacement Rate

Methodology

Michael WolfEmployment Projections Program

PMP SummitJune 3, 2014

Overview

Proposed Methodology Advantages of New Method Analysis of Results Issues and Future Considerations

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Proposed Methodology

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Proposed Method

Survey data are used to measure labor force exits and occupational transfers

Regression models are used to estimate projected rates of separations for each occupation

Projected rates are used to calculate projections of separations

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Labor Force Exits

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CPS measures individual household members for 4 months, then for 4 months again after an 8 month break

If a matched worker was in the labor force for the first 4 months, and out of the labor force for the last 4, they are counted as having exited the labor force

Labor Force Exits

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Records where individuals moved in and out of the labor force within either 4 month period are excluded from analysis Intended to remove temporary

leavers and those marginally attached to the labor force

Also removes noise from the data

Occupational Transfers

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•If

CPS ASEC (March) supplement asks about work activity in prior calendar year

Respondents are asked whether their longest job in the prior year was the same as their current job

If not, the occupation of their longest job from the prior year is coded

Occupational Transfers

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•If

Why ASEC supplement? Monthly CPS occupation data is

only dependently coded for months 2,3,4 and 6,7,8 – values a year apart are independently coded

January supplement also asks about occupation from prior year, but is more seasonally affected, and also is only conducted biennially

Occupational Transfers

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•If

If respondents were employed in a different SOC major group in the prior year, they are considered to have transferred from their prior occupation

Major group transfers used because Major group coding is more reliable Eliminates transfers between

comparable occupations, like retail salespersons and parts salespersons

Comparison – data use

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•If

Cohort method takes difference between estimates of employment for a specific occupation by age cohort at two points in time

Alternate method uses longitudinal aspects of CPS to directly measure workers who separate from the labor force or transfer occupations

Comparison – concepts

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•If

Cohort method measures separations net of entrants for each cohort – some separations are not measured

Labor force method measures leavers who are out of the labor force for a full 4 months

Occupational transfers method measures workers who change SOC major occupational groups

Advantages of New Method

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Direct Measure

Longitudinal survey data identifies individual workers who leave an occupation

Old method uses panel data and demographics to estimate the number of workers who leave

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Differentiation of leavers

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OccupationOccupational Transfer Rate

Labor Force Exit Rate

Postal Service Clerks 35.9% 44.3%Management Analysts 47.3% 27.0%

Clearer for users what is being measured

Still cannot directly estimate retirements

Robust methods

Regression uses more information Explanatory variables include:

Age Sex Educational attainment Economic conditions

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Robust methods Projections incorporated consistently

Old:

New:

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Employment Change

Replacement Needs

Job Openings due to Growth and Replacement Needs

2,600 3,800 6,400-5,800 5,000 5,000

Employment Change

Occupational Separations

Openings due to Employment Change and Occupational Separations

2,400 17,200 19,600-5,800 19,400 13,600

More reliable results

Method works for new SOC occupations

Fewer proxies for small occupations All together, data available for 118

additional occupations17

 Occupation TitleReplacement Rate

Occupational Separation Rate

Computer systems analysts 15.7% 54.5%Information security analysts 15.7% 54.1%

Web developers 15.7% 63.7%

More reliable results Consistency year to year

130 occupations had rates that changed by at least 10 percentage points

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2010-20 Replacement Rate

2012-22 Replacement Rate

Actuaries 60.4 28.4

Animal Trainers 9.7 44.2

Budget Analysts 21.2 40.1

Dredge Operators 29.6 8.0

State-based results

Demographics of occupations vary state-to-state

Regression coefficients must be based on national data

Can be applied to state-based demographics

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Analysis of Results

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Total Job Openings

2012 employment of 145 million projected to increase to 161 million by 2022.

Projected job openings, 2012-22: 16 million openings due to growth 155 million separations

– 65 million labor force leavers– 90 million occupational transfers

171 million openings in total

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Total Job Openings

What does 171 million openings mean? Equivalent to every current worker

either leaving the labor force or changing occupations once, on average, over the next 10 years

JOLTS shows 558 million hires, 553 million separations, from 2003-2012

BLS projects 35 million labor force entrants from 2012-2022

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Example - Teachers

 NCES Projections2012 Employment

2022 Employment

Employment Change, 2012-22

New Hires, 2013-22

Elementary and Secondary teachers 3,511,000 3,931,000 420,000 4,201,00023

 BLS Projections

2012 Employment

2022 Employment

Employment Change, 2012-22

Job Openings due to Growth and Replacement Needs, 2012-22

Openings due to Employment Change and Occupational Separations, 2012-22

Preschool, primary, secondary, and special education school teachers 4,115,300 4,544,700 429,400 1,401,200 3,537,600

Example - Lawyers

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Job Openings due to Growth and Replacement Needs, 2012-22

Openings due to Employment Change and Occupational Separations, 2012-22

Lawyers 196,500 414,600

ABA reports 29,000 law school graduates find employment in positions requiring bar passage on average from 2011-2013

Example – Registered Nurses

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NCSBN reports an average of 211,000 newly licensed registered nurses per year, 2009-2011

 

Job Openings due to Growth and Replacement Needs, 2012-22

Openings due to Employment Change and Occupational Separations, 2012-22

Registered nurses 1,052,600 1,853,700

Issues and Future Considerations

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Issues

Who will fill these openings? Old/young New/experienced Education level/degree Foreign/domestic

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Issues

Communications with data users New methods New terminology Significantly different results

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Next Steps

Gather feedback through Summer 2014

Review and modify methods, if necessary

Final decision by end of calendar 2014

Next projections published December 2015

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Contact Information

Michael WolfBranch Chief

Employment Projections Programwww.bls.gov/emp

202-691-5714wolf.michael@bls.gov