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

04/01/2001

We used the NISP to convert payroll by industry to payroll by occupation in our study regions. This conversion methodology is similar to the one we employed to convert employment by industry to employment by occupation, with one exception: we only had the 1998 NISP for payroll, whereas we had the NISP for employment for all years. Therefore, by using the 1998 NISP to convert payroll by industry to payroll by occupation for 1993, 1996, and 1998, we were implicitly making the assumption that the distribution of payroll by occupation in an industry did not change by region or by year. We used the CPS March Supplement for 1994, 1996, and 1998 to test the plausibility of this assumption. We compared the distribution of payroll by occupation by skill level in an industry for urban (MSA) versus rural (non-MSA) areas and for four geographic regions (Northeast, Midwest, South, and West) across the three years. We found that the distribution of payroll by skill level in one-digit industries was consistent across four regions and urban versus rural areas for most industries.

Examining the CPS employment and payroll shares over time, we found that the share of low-skill employment was relatively constant over time (about 28 percent of employment was low-skill), while the percent of payroll declined over time (the share of low-skill payroll declined from 18 to 16 percent). This implied that the gap between low-skill and high-skill wages increased over time. Examining the NISP, we found a slight increase in low-skill employment over time (from 41 to 42 percent). Therefore, by applying the 1998 NISP wage distribution to the earlier years, and not allocating a smaller share of payroll in the earlier years (because the share of low-skill employment was smaller), we were implicitly assuming that the gap between low-skill and high-skill wages increased over time, similar to the CPS analysis.

Exhibit B.1
Percent Distribution of Payroll, 1994
By Industry, Skill Category, and Region
Industry Skill Level U.S. MSA Non-MSA Northeast Midwest South West
Agriculture Low-Skill 50.9 49.8 52.5 39.2 43.9 49.5 62.0
Medium-Skill 25.2 23.5 28.2 35.1 24.7 25.6 21.6
High-Skill 23.9 26.7 19.3 25.7 31.5 24.9 16.4
Mining Low-Skill 9.1 8.3 10.2 25.5 8.3 7.7 8.8
Medium-Skill 50.0 36.6 71.1 46.7 50.0 45.5 64.0
High-Skill 40.9 55.0 18.7 27.8 41.8 46.8 27.2
Construction Low-Skill 14.5 13.3 19.8 14.2 13.6 15.2 14.5
Medium-Skill 61.1 60.1 64.9 62.5 65.2 60.1 57.3
High-Skill 24.4 26.6 15.3 23.3 21.2 24.7 28.2
Manufacturing Low-Skill 14.0 12.8 18.7 12.3 16.9 13.6 11.7
Medium-Skill 49.9 47.0 61.9 46.4 52.3 53.0 45.2
High-Skill 36.1 40.3 19.5 41.3 30.9 33.3 43.2
Transportation Low-Skill 33.1 31.9 39.3 32.7 36.1 31.9 32.0
Medium-Skill 39.8 38.9 44.9 36.8 38.5 42.1 40.6
High-Skill 27.1 29.2 15.8 30.5 25.3 26.0 27.4
Wholesale Trade Low-Skill 17.4 16.4 23.4 18.3 19.9 15.3 16.8
Medium-Skill 64.0 63.9 64.0 60.4 63.2 67.2 62.8
High-Skill 18.7 19.7 12.7 21.3 16.9 17.5 20.4
Retail Trade Low-Skill 34.5 34.4 34.7 34.3 35.5 33.6 34.7
Medium-Skill 54.0 53.5 56.6 54.9 51.2 55.4 54.1
High-Skill 11.6 12.1 8.7 10.8 13.3 11.0 11.1
Finance Low-Skill 12.3 12.0 15.5 11.4 13.4 12.7 11.5
Medium-Skill 27.5 27.1 30.9 24.3 29.6 26.8 30.4
High-Skill 60.3 60.9 53.6 64.3 56.9 60.5 58.1
Services Low-Skill 12.7 12.5 13.8 12.0 12.2 12.2 14.4
Medium-Skill 31.9 31.7 33.2 30.9 32.4 34.3 29.3
High-Skill 55.4 55.9 53.0 57.1 55.4 53.5 56.3
Public Low-Skill 10.8 10.6 11.8 10.3 11.6 11.5 9.6
Medium-Skill 60.3 59.5 64.7 62.7 66.0 56.0 60.7
High-Skill 28.8 29.9 23.5 27.0 22.4 32.5 29.8
Total Low-Skill 17.6 17.0 21.0 16.4 18.8 17.4 17.9
Medium-Skill 43.3 42.0 50.1 40.8 44.8 45.1 41.4
High-Skill 39.1 41.0 28.8 42.8 36.3 37.5 40.7
Source: Lewin calculations using the CPS March Supplement.
Exhibit B.2
Percent Distribution of Payroll, 1996
By Industry, Skill Category, and Region
Industry Skill Level U.S. MSA Non-MSA Northeast Midwest South West
Agriculture Low-Skill 42.7 47.2 36.7 37.4 45.0 38.0 47.6
Medium-Skill 34.1 25.4 45.6 22.3 34.5 42.2 28.9
High-Skill 23.2 27.4 17.7 40.2 20.5 19.8 23.5
Mining Low-Skill 10.1 8.1 12.4 1.9 12.3 12.4 6.1
Medium-Skill 55.8 44.7 68.7 67.6 60.4 57.3 47.5
High-Skill 34.1 47.2 18.9 30.5 27.2 30.3 46.5
Construction Low-Skill 11.7 11.3 13.9 13.3 11.0 12.6 9.7
Medium-Skill 59.5 57.7 69.5 60.7 63.8 58.0 56.6
High-Skill 28.8 31.0 16.6 26.0 25.1 29.4 33.7
Manufacturing Low-Skill 13.3 12.2 18.6 10.6 16.1 12.6 12.7
Medium-Skill 47.5 44.1 63.5 42.6 51.1 51.8 40.8
High-Skill 39.2 43.8 17.9 46.8 32.8 35.6 46.6
Transportation Low-Skill 33.5 32.3 40.7 30.8 40.2 31.6 32.2
Medium-Skill 37.3 36.8 40.5 38.9 34.3 38.0 37.7
High-Skill 29.2 30.9 18.9 30.3 25.5 30.4 30.1
Wholesale Trade Low-Skill 16.8 15.4 27.4 17.3 14.6 17.1 18.5
Medium-Skill 63.9 64.2 61.9 63.0 70.8 61.7 59.9
High-Skill 19.2 20.4 10.7 19.7 14.5 21.2 21.6
Retail Trade Low-Skill 33.1 32.6 36.5 33.2 32.0 33.8 33.3
Medium-Skill 55.8 56.0 54.4 56.1 56.2 54.1 57.6
High-Skill 11.1 11.4 9.1 10.7 11.8 12.1 9.0
Finance Low-Skill 10.6 10.2 14.4 8.4 11.2 12.6 10.3
Medium-Skill 24.8 24.3 30.0 19.7 22.7 25.8 33.8
High-Skill 64.6 65.4 55.6 72.0 66.1 61.7 55.9
Services Low-Skill 11.1 11.0 12.1 10.9 10.5 10.3 13.0
Medium-Skill 28.5 28.0 32.0 27.4 28.8 29.2 28.1
High-Skill 60.5 61.1 55.9 61.6 60.7 60.5 58.9
Public Low-Skill 10.3 9.6 14.0 9.0 11.7 9.7 11.0
Medium-Skill 59.0 59.2 57.7 63.8 59.1 58.1 56.7
High-Skill 30.7 31.1 28.2 27.2 29.2 32.1 32.3
Total Low-Skill 16.4 15.6 20.7 14.7 17.3 16.2 17.1
Medium-Skill 41.2 39.8 49.4 38.3 42.9 42.4 40.1
High-Skill 42.5 44.6 29.9 47.0 39.9 41.3 42.8
Source: Lewin calculations using the CPS March Supplement.
Exhibit B.3
Percent Distribution of Payroll, 1998
By Industry, Skill Category, and Region
Industry Skill Level U.S. MSA Non-MSA Northeast Midwest South West
Agriculture Low-Skill 56.5 61.6 47.1 58.1 37.1 57.6 64.3
Medium-Skill 19.5 20.8 17.2 16.6 24.3 21.2 16.7
High-Skill 24.0 17.7 35.7 25.3 38.7 21.2 19.0
Mining Low-Skill 6.0 6.2 5.8 34.0 4.1 4.5 7.1
Medium-Skill 56.8 41.5 78.4 64.0 63.7 51.4 68.5
High-Skill 37.2 52.3 15.8 2.0 32.2 44.1 24.4
Construction Low-Skill 11.5 10.5 16.6 9.1 13.4 10.9 12.4
Medium-Skill 62.5 62.1 64.5 65.1 66.3 59.1 62.0
High-Skill 26.0 27.4 18.8 25.8 20.4 29.9 25.6
Manufacturing Low-Skill 12.7 11.7 16.6 10.7 14.8 13.3 10.3
Medium-Skill 48.7 45.9 60.6 44.8 50.1 53.3 43.5
High-Skill 38.6 42.3 22.8 44.5 35.2 33.4 46.2
Transportation Low-Skill 34.0 33.2 39.7 35.1 35.1 33.6 32.6
Medium-Skill 34.3 33.6 38.9 36.3 36.0 33.6 31.9
High-Skill 31.7 33.2 21.4 28.7 28.9 32.8 35.5
Wholesale Trade Low-Skill 15.8 15.4 19.2 14.2 17.3 13.8 18.3
Medium-Skill 62.0 60.7 73.1 60.4 65.9 63.3 57.5
High-Skill 22.2 23.9 7.8 25.4 16.7 22.8 24.2
Retail Trade Low-Skill 33.6 33.0 37.1 31.6 32.4 34.1 35.6
Medium-Skill 54.8 54.6 55.6 56.2 54.8 55.5 52.5
High-Skill 11.6 12.4 7.3 12.2 12.8 10.4 12.0
Finance Low-Skill 10.6 10.0 18.9 8.3 12.3 10.7 12.2
Medium-Skill 22.9 23.0 21.3 20.4 25.2 24.7 21.5
High-Skill 66.4 66.9 59.8 71.3 62.5 64.6 66.3
Services Low-Skill 11.2 11.0 12.9 10.9 10.0 10.9 13.0
Medium-Skill 27.9 27.3 32.5 29.7 26.6 27.5 28.1
High-Skill 60.9 61.7 54.5 59.4 63.3 61.6 59.0
Public Low-Skill 11.7 11.9 10.2 10.8 13.8 11.2 11.6
Medium-Skill 58.4 56.7 68.2 63.5 60.3 54.3 59.2
High-Skill 29.9 31.3 21.7 25.7 25.9 34.5 29.2
Total Low-Skill 16.4 15.9 20.1 14.9 16.5 16.6 17.6
Medium-Skill 40.3 38.9 48.9 39.1 41.7 41.0 38.7
High-Skill 43.3 45.2 31.0 46.0 41.8 42.3 43.7
Source: Lewin calculations using the CPS March Supplement.