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.
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:
manufacturing,
enterprise,
industrial,
sale,
employed,
accounting,
sector,
estimates employment,
classified,
industrial classification,
classification,
classifying,
employment estimates,
sectoral,
warehousing,
wholesale,
industry variation,
retail,
rates employment
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The model is able to label words and phrases by part-of-speech,
including "organizations." By filtering for frequent words and phrases labeled as "organizations", papers are
identified to contain references to specific institutions, datasets, and other organizations.
:
Standard Industrial Classification,
Bureau of Labor Statistics,
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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