Tuesday, May 24, 2011

Industrial Evolution

From Chapter 2 of the Federal Reserve Bank of St. Louis's Annual Report for the Year 2010: evolution of sectoral employment.  This figure displays the change in employment over the last eleven years (click to enlarge).  


  1. There are too many shades of blue on this graph, but I believe education and health is the top line. If so, Becker would love this graph if you sorted it by human capital within the sector and showed the more human capital intensive sectors experience more stable growth than sectors less reliant on human capital.

  2. You are correct in your belief that education and health services are the top line.

    I'm mildly surprised that one would predict human capital sectors to have more stable growth. A priori, I'd expect sectors intensive in human capital to be highly adaptable, quickly adjusting to new technologies and expectations about future technologies.

    My best off-the-cuff guess as to the ordering of human capital (including noncognitive) as a proportion of gross product would be:
    1) Leisure, Hospitality Services
    2) Information, financial, other services
    3) Education, health services
    4) Professional, Business Services
    5) Trade, transportation, utilities
    6) Government
    7) Manufacturing
    8) Construction, mining, logging

    I could be wrong, but I imagine health services are actually rather capital intensive, which is why education and health services are lower than others, which are less real capital intensive.

    How does that ordering stack up with the final 2011 ranking?

    Which is a pretty reasonable "confirmation" of your hypothesis given your prediction and my noisy ranking.