Summary: Pursuant to a congressional request, GAO reviewed the employment projection process that the Bureau of Labor Statistics (BLS) uses to project future employment levels and analyze the effects of major determining factors on the BLS projections of 1995 employment levels.
GAO found that BLS uses a system of five interlinked economic models to project: (1) the size of the labor force; (2) the level of aggregate economic activity; (3) the demand for goods and services by industry; and (4) the demand for labor by industry and by occupation. The BLS process is based on basic economic principles that show changes in the level and distribution of aggregate demand and new technologies as the primary determinants of changing levels in individual industries and occupations. GAO identified five major determinants of the projections: (1) the projected level of gross national product (GNP); (2) demand distribution; (3) productivity; (4) input-output relationships among industries; and (5) staffing patterns. GAO used two sets of computer simulations to illustrate the relative effects of these determinants. These simulations showed that the projected level of GNP has had a relatively greater effect on projected employment levels than any other determinant and that the relative importance of the other determinants varied substantially from one industry to another and from one occupation to another. GAO found that it was these factors that actually affected how the projected growth in employment varies among industries and occupations.
