How are projections made?

The projections are the product of four steps:

Step 1: Project Industry Employment
Data from the Quarterly Census of Employment and Wages (QCEW) are used to determine the number of jobs for each industry during the first year (base year) of the projection period.¹ For the purposes of the projections, certain types of public-sector employment – education, hospitals, rail transportation, and U.S. Postal Service – are combined with employment in private-sector industries.

Projections are made for each industry based on historical trends and expected changes in important economic indicators, Alaska and U.S. population projections, and other industry-specific variables. Consideration is also given to knowledge of specific projects and observations of the current economic climate.

Step 2: Determine the occupational makeup, or “staffing pattern”, of each industry
In order to estimate base year employment for each occupation, the occupational “staffing pattern” of each industry must be determined. Most industries have a wide variety of occupations. The staffing pattern of an industry is the breakdown of each occupation’s share of the industry’s total employment (referred to as “staffing ratios”).

Employers in Alaska report the occupations of their workers when they submit their unemployment insurance quarterly contributions report.² The reported occupations are the basis of Alaska’s Occupational Database (ODB). An analysis of the three most recent years of ODB data are used to calculate occupational staffing ratios for each industry.

Step 3: Calculate base year and projected occupation employment
Each industry’s estimated base year employment is multiplied by the staffing ratio for each occupation. The results are then summed by each occupation to get the base year estimate.

For the projections, staffing ratios within an industry are adjusted using “change factors.” Change factors are multipliers that increase or decrease an occupation’s estimated share of industry employment based on factors other than an industry’s projected employment change. Some examples are changes in consumer demands, technology, or business practices.

Each industry’s projected employment is then multiplied by the adjusted staffing ratio for each occupation. The results are then summed by each occupation to get the projections.

Step 4: Estimate job openings
Job openings for an occupation result from both job growth and replacements of workers that leave the occupation. An occupation’s growth openings are equal to its positive change over the projection period. Replacement openings are estimated using a combination of BLS formulas and formulas derived from an analysis of historical ODB data.

Footnotes:
1/ Estimates and projections do not include self-employed workers, private household workers, most agriculture workers and fishermen, and others who are not covered by the state’s unemployment insurance program.
2/ Since the ODB does not include federal government workers, OES survey data are used to determine federal government staffing ratios.