How Well Have Rural and Small Metropolitan Labor Markets Absorbed Welfare Recipients?. Comparison of NISP Employment Across Regions Using the CPS

04/01/2001

We used the National Industry Staffing Patterns (NISP) to convert employment by industry to employment by occupation in our study regions. By using a national distribution of occupations by industry for 12 different regions, we implicitly made the assumption that the distribution of employment by occupations in an industry did not change by region. We used the CPS Outgoing Rotation Groups for 1994, 1996, and 1998 to test the plausibility of this assumption.(1) We compared the distribution of occupations by skill level (low, medium, and high) by one-digit industry for urban (MSA) versus rural (non-MSA) areas and for four geographic regions (Northeast, Midwest, South, and West).

The CPS had a higher percentage of medium-skill workers and a lower percentage of low-skill workers compared to the NISP. This difference between the two data sources stems from the nature of the two surveys. The NISP (derived from the Occupational Employment Statistics (OES)) is an employer survey, in which employers answer questions about the occupations of their employees. The CPS is a household survey, in which individuals themselves answer questions about their occupation. We believe that there is occupation creep in the CPS, which means that individuals are likely to report being in higher-skill occupations than they actually are. For example, a food preparation worker (low-skill) might report himself as a restaurant cook (medium-skill). We do not think that this issue presents a problem for our analysis, because occupation-creep is likely to be consistent across regions.

We found that the distribution of skill levels across one-digit industries was consistent across four regions and urban versus rural areas for most industries. Agriculture and mining were the two industries that varied across rural versus urban areas and across regions. We concluded that we had a reasonable degree of confidence in the NISP, with the caveat that we might have introduced some measurement error in the agriculture and mining industries. It is important to note that we selected areas that did not have a large share of agricultural or mining employment.

Exhibit A.1
Percent Distribution of Employment, 1994
By Industry, Skill Category, and Region
Industry Skill Level U.S. MSA Non-MSA Northeast Midwest South West
Agriculture Low-Skill 41.6 52.1 32.1 42.3 27.6 45.5 54.4
Medium-Skill 49.2 35.8 61.4 45.8 64.3 45.3 35.9
High-Skill 9.2 12.2 6.5 11.9 8.0 9.2 9.7
Mining Low-Skill 11.1 9.2 13.3 18.0 15.1 9.5 11.6
Medium-Skill 60.1 49.1 73.2 61.7 66.9 57.6 64.4
High-Skill 28.8 41.7 13.5 20.4 18.1 32.9 24.0
Construction Low-Skill 15.3 15.0 16.2 14.7 14.1 16.4 15.0
Medium-Skill 69.3 68.3 72.7 71.6 72.1 68.5 66.2
High-Skill 15.4 16.7 11.1 13.7 13.8 15.1 18.8
Manufacturing Low-Skill 19.4 18.1 23.2 17.8 20.9 19.7 18.0
Medium-Skill 58.3 55.6 66.0 55.9 59.5 61.8 52.1
High-Skill 22.3 26.4 10.8 26.3 19.6 18.6 30.0
Transportation Low-Skill 42.6 41.2 49.1 41.3 43.8 43.3 41.2
Medium-Skill 39.3 39.5 38.5 40.5 38.3 38.7 40.2
High-Skill 18.1 19.4 12.5 18.2 17.9 18.0 18.6
Wholesale Trade Low-Skill 26.1 25.1 30.8 26.1 27.0 26.0 25.1
Medium-Skill 59.9 59.7 61.3 59.2 59.8 60.3 60.1
High-Skill 14.0 15.3 7.9 14.7 13.2 13.7 14.8
Retail Trade Low-Skill 47.2 47.5 45.9 48.2 47.5 47.4 45.6
Medium-Skill 47.6 46.9 50.2 47.0 46.8 47.7 48.9
High-Skill 5.2 5.6 3.9 4.8 5.7 4.8 5.6
Finance Low-Skill 21.3 20.8 25.1 19.6 21.9 22.2 21.1
Medium-Skill 31.2 30.8 34.2 29.3 31.7 32.1 31.4
High-Skill 47.5 48.5 40.7 51.2 46.5 45.7 47.5
Services Low-Skill 24.6 24.0 27.2 22.2 25.0 24.5 26.5
Medium-Skill 36.5 35.9 39.2 35.9 37.5 37.6 34.3
High-Skill 38.9 40.1 33.6 41.8 37.5 37.8 39.2
Public Low-Skill 17.0 16.8 18.0 14.7 16.8 17.3 18.5
Medium-Skill 58.9 58.2 61.8 63.2 59.2 58.0 56.8
High-Skill 24.1 25.0 20.3 22.1 24.1 24.7 24.6
Total Low-Skill 28.2 27.8 29.9 26.6 28.3 28.6 29
Medium-Skill 46.3 44.7 52.2 45 47.8 47.3 43.9
High-Skill 25.5 27.6 17.9 28.4 23.8 24.1 27.1
Source: Lewin calculations using the CPS Outgoing Rotation Groups.
Exhibit A.2
Percent Distribution of Employment, 1996
By Industry, Skill Category, and Region
Industry Skill Level U.S. MSA Non-MSA Northeast Midwest South West
Agriculture Low-Skill 46.3 54.7 36.6 51.8 34.7 45.6 58.7
Medium-Skill 43.6 33.6 55.1 32.8 56.6 43.5 32.5
High-Skill 10.1 11.7 8.3 15.5 8.7 10.9 8.8
Mining Low-Skill 11.7 13.1 10.1 19.1 14.7 9.2 14.5
Medium-Skill 64.4 52.0 78.0 61.2 70.5 63.2 64.7
High-Skill 24.0 34.9 11.9 19.7 14.8 27.6 20.8
Construction Low-Skill 15.6 15.3 16.9 16.2 15.0 15.9 15.3
Medium-Skill 67.5 66.7 70.5 66.8 68.8 68.3 65.4
High-Skill 16.9 18.0 12.7 17.0 16.2 15.8 19.4
Manufacturing Low-Skill 20.0 18.3 25.2 17.9 22.4 19.9 18.2
Medium-Skill 56.3 54.1 63.1 54.5 56.5 60.1 51.1
High-Skill 23.8 27.6 11.8 27.6 21.1 20.1 30.7
Transportation Low-Skill 42.2 41.0 48.1 41.3 45.6 41.8 39.9
Medium-Skill 38.1 38.2 37.5 40.5 36.2 37.6 39.0
High-Skill 19.7 20.8 14.4 18.2 18.3 20.6 21.1
Wholesale Trade Low-Skill 26.8 25.2 35.3 28.0 26.3 26.6 26.8
Medium-Skill 59.3 59.8 56.8 56.2 60.5 61.2 57.8
High-Skill 13.9 15.0 8.0 15.8 13.2 12.3 15.4
Retail Trade Low-Skill 47.6 47.4 48.3 47.3 48.8 46.8 47.6
Medium-Skill 47.0 46.7 48.4 47.4 45.5 48.0 47.0
High-Skill 5.4 5.9 3.4 5.3 5.7 5.2 5.4
Finance Low-Skill 21.1 20.5 25.6 19.4 21.9 22.1 20.5
Medium-Skill 29.2 28.8 32.4 27.4 27.5 30.6 30.9
High-Skill 49.7 50.7 42.0 53.3 50.6 47.3 48.5
Services Low-Skill 23.9 23.4 26.3 23.0 24.2 23.5 25.0
Medium-Skill 35.5 34.7 39.4 34.8 36.4 36.4 33.7
High-Skill 40.7 41.9 34.3 42.2 39.5 40.1 41.3
Public Low-Skill 16.1 15.3 19.7 14.2 16.9 16.4 16.3
Medium-Skill 59.2 59.2 59.3 61.8 60.0 57.6 59.4
High-Skill 24.7 25.5 21.0 24.1 23.1 26.0 24.3
Total Low-Skill 28.2 27.5 31.0 26.9 28.9 28 28.8
Medium-Skill 44.9 43.7 50.4 43.5 45.8 46.4 42.9
High-Skill 26.9 28.8 18.6 29.6 25.3 25.6 28.3
Source: Lewin calculations using the CPS Outgoing Rotation Groups.
Exhibit A.3
Percent Distribution of Employment, 1998
By Industry, Skill Category, and Region
Industry Skill Level U.S. MSA Non-MSA Northeast Midwest South West
Agriculture Low-Skill 47.3 54.0 38.5 49.6 34.9 44.8 60.6
Medium-Skill 41.1 32.8 52.0 39.1 55.0 41.6 28.4
High-Skill 11.6 13.3 9.5 11.3 10.1 13.5 11.0
Mining Low-Skill 12.6 11.6 13.8 7.2 16.7 11.9 13.6
Medium-Skill 59.7 48.6 73.3 69.4 62.4 57.3 62.7
High-Skill 27.7 39.9 13.0 23.4 20.9 30.8 23.8
Construction Low-Skill 14.1 13.7 15.8 14.4 13.5 13.7 15.2
Medium-Skill 68.6 67.8 71.5 68.1 71.1 68.9 65.9
High-Skill 17.3 18.5 12.8 17.5 15.4 17.5 18.9
Manufacturing Low-Skill 19.4 18.0 23.8 17.5 21.8 19.5 17.1
Medium-Skill 56.2 53.9 63.7 54.3 55.8 60.1 52.0
High-Skill 24.4 28.1 12.5 28.2 22.4 20.4 30.9
Transportation Low-Skill 43.1 41.9 48.8 41.8 45.3 43.4 41.3
Medium-Skill 36.5 36.4 37.2 39.0 36.0 34.9 37.5
High-Skill 20.5 21.7 14.0 19.2 18.7 21.7 21.2
Wholesale Trade Low-Skill 26.2 26.0 27.7 25.3 26.5 25.5 27.7
Medium-Skill 58.2 57.4 63.1 57.8 59.8 59.6 55.2
High-Skill 15.5 16.7 9.2 16.9 13.8 15.0 17.1
Retail Trade Low-Skill 47.5 47.8 46.4 47.9 47.5 47.3 47.5
Medium-Skill 46.9 46.4 49.3 46.7 46.8 47.1 47.0
High-Skill 5.6 5.9 4.3 5.4 5.7 5.7 5.5
Finance Low-Skill 20.9 20.2 26.9 19.2 22.0 21.6 20.4
Medium-Skill 27.6 27.6 27.9 25.9 26.3 29.4 27.9
High-Skill 51.5 52.3 45.2 54.9 51.7 49.0 51.6
Services Low-Skill 23.6 23.0 26.4 22.5 23.6 22.7 25.6
Medium-Skill 34.9 34.1 39.3 35.7 35.2 35.9 32.6
High-Skill 41.5 42.9 34.2 41.7 41.2 41.3 41.8
Public Low-Skill 15.6 15.5 15.9 16.4 14.6 15.0 16.7
Medium-Skill 59.2 57.7 65.5 63.4 60.9 57.5 57.0
High-Skill 25.3 26.8 18.6 20.2 24.5 27.5 26.3
Total Low-Skill 27.9 27.4 30.1 26.9 28.1 27.5 29.1
Medium-Skill 44.4 42.9 50.7 43.6 45.3 45.6 41.9
High-Skill 27.7 29.7 19.1 29.5 26.6 26.8 29.0
Source: Lewin calculations using the CPS Outgoing Rotation Groups.