CREAT: Census Research Exploration and Analysis Tool

The Effects of Industry Classification Changes on US Employment Composition

June 2018

Working Paper Number:

CES-18-28

Abstract

This paper documents the extent to which compositional changes in US employment from 1976 to 2009 are due to changes in the industry classification scheme used to categorize economic activity. In 1997, US statistical agencies began implementation of a change from the Standard Industrial Classification System (SIC) to the North American Industrial Classification System (NAICS). NAICS was designed to provide a consistent classification scheme that consolidated declining or obsolete industries and added categories for new industries. Under NAICS, many activities previously classified as Manufacturing, Wholesale Trade, or Retail Trade were re-classified into the Services sector. This re-classification resulted in a significant shift of measured activities across sectors without any change in underlying economic activity. Using a newly developed establishment-level database of employment activity that is consistently classified on a NAICS basis, this paper shows that the change from SIC to NAICS increased the share of Services employment by approximately 36 percent. 7.6 percent of US manufacturing employment, equal to approximately 1.4 million jobs, was reclassified to services. Retail trade and wholesale trade also experienced a significant reclassification of activities in the transition.

Document Tags and Keywords

Keywords Keywords are automatically generated using KeyBERT, a powerful and innovative keyword extraction tool that utilizes BERT embeddings to ensure high-quality and contextually relevant keywords.

By analyzing the content of working papers, KeyBERT identifies terms and phrases that capture the essence of the text, highlighting the most significant topics and trends. This approach not only enhances searchability but provides connections that go beyond potentially domain-specific author-defined keywords.
:
industrial, sale, enterprise, manufacturing, employed, accounting, sector, estimates employment, classifying, classified, industrial classification, classification, employment estimates, sectoral, warehousing, wholesale, industry variation, retail

Tags Tags are automatically generated using a pretrained language model from spaCy, which excels at several tasks, including entity tagging.

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:
Bureau of Labor Statistics, Standard Industrial Classification, Center for Economic Studies, Bureau of Economic Analysis, County Business Patterns, Financial, Insurance and Real Estate Industries, Longitudinal Business Database, Retail Trade, Census of Manufacturing Firms, Census of Retail Trade, Economic Census, Census of Services, North American Industry Classification System, World Trade Organization

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