The Employment Cost Index (ECI) measures the change in compensation costs while controlling for any employment shifts among occupational and industry groups. Occupational and industry classification systems and weights are used to ensure these groups are held constant over time. The ECI’s weights are changed periodically after remaining fixed for a number of years. Because the ECI’s employment weights remain fixed for long periods, it is possible for the fixed weights to differ significantly from the current weighting of the economy. Implementing updated coding systems and weights helps ensure that the ECI remains relevant.
Fixed weight updates
There are two types of weights used in the ECI: sample weights and fixed weights. Sample weights apply to each surveyed occupation within an establishment and represent the inverse probability of selection. Fixed weights are applied to the compensation costs of an occupational group within an industry group. These weights represent the occupational and industry employment counts at one point in time, and are held constant within the ECI until the next reweight.
Beginning with the June 1986 ECI, the 1980 Census of Population from the Census Bureau replaced the 1970 Census of Population. At the level at which ECI occupational indexes were published, the 1980 census definitions of the major occupational groups were similar to those for the 1970 census. Some detailed occupations that were defined in both 1970 and 1980 were shifted to a different major occupational group between the two years. For more information on the reweight, see Introducing new weights for the Employment Cost Index.
The 1987 Standard Industrial Classification (SIC) was first used in the March 1991 ECI. This was the last revision of the SIC industry classification by the United States government. Over 1,100 changes were recommended by different groups such as businesses and government agencies. These revisions included creating new industries, consolidating others, and changing the boundaries of industry groups to reflect how the economy had changed.
The 2002 North American Industry Classification System (NAICS) was first used in the March 2006 ECI. It was adopted as the standard industrial and occupational classification systems to be used by all Federal statistical agencies to provide a means of comparing data across agencies. The switch introduced new series, discontinued some series, and made some series from the 1987 SIC structure either continuous or not continuous with the new series. For more information on the continuous and not continuous series as well as the criteria for determining them, see Change in coming to the ECI.
The 2007 North American Industry Classification System (NAICS) was first used in the December 2007 ECI. This conversion resulted in small changes to definitions for manufacturing, telecommunications, financial activities, and professional and technical services. Updates were also done to several industry titles and descriptions. Differences between the two NAICS systems did not affect any of the published ECI series.
The 2012 North American Industry Classification System (NAICS) was first used in the December 2013 ECI. This conversion resulted in small changes to the content of manufacturing and retail trade sectors. It also had minor changes in the coding in the utilities and the leisure and hospitality sectors. Updates were also done to several industry titles and descriptions.
The ECI currently uses the Standard Occupational Classification (SOC) system to aid in sampling jobs as well as publishing data by occupational group. In order to reflect the most up to date occupations in the economy, the classification is periodically updated based on the Census of Population.
History of Occupational Classification Updates in the ECI
1970 Occupational Classification System
March 1976 – March 1986
1980 Occupational Classification System
June 1986 – December 1994
1990 Occupational Classification System
March 1995 – December 2005
2000 Standard Occupational Classification
March 2006 – September 2013
2010 Standard Occupational Classification
December 2013 – September 2022
2018 Standard Occupational Classification
December 2022 - Present
What changed with each new occupational classification?
The 1970 Occupational Classification System (OCS) was based on the Census of Population and was used when the ECI was first published in June 1976. For 1970, the occupational classification included 441 occupational categories.
The 1980 Occupational Classification System (OCS) was first used with the June 1986 ECI. It had 503 occupational categories, an increase of 14 percent from 1970. The 1980 OCS was a major departure from earlier censuses because it was developed to be consistent with the 1980 Standard Occupational Classification (SOC) manual. The 1980 OCS had 13 major occupational groups that mapped into the 20 SOC divisions.
The 1990 Occupational Classification System (OCS) was first used with the March 1995 ECI release, and it is based on the 1990 Census of Population and Housing Classified Index of Industries and Occupations. The Census Index classifies occupations into about 500 occupation classifications within 13 major group categories.
The 2000 Standard Occupational Classification (SOC) system replaced the 1990 OCS beginning with the March 2006 ECI release, based on the Census of Population. The white-collar and blue-collar occupational series were discontinued in 2007 and occupational series were presented by the aggregate groups specified in the SOC manual. The 2000 SOC had 821 detailed occupations.For more information on the discontinuous series as well as the criteria for determining them, see Change in coming to the ECI.
The 2010 Standard Occupational Classification (SOC) system was first used with the December 2013 ECI release. It contains 840 detailed occupations, aggregated in 461 broad occupations. There are 97 minor occupational groups and 23 major groups, The 2010 SOC revision process resulted in both major and minor changes to the 2000 SOC, with significant updates to information technology, healthcare, and human resource occupations.