OSDS: FAQs

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Frequently Asked Questions (FAQs)

1. Who should use OSDS? How can this help?

Supply/demand data are helpful for employers and human resource managers as they look at the education levels of their potential applicant pools. It can show program planners where the need for trained workers lies. Supply/demand data are important for career counselors and One-Stop staff, who can recommend that individuals enroll in training programs that will result in the skills demanded by employers. Workforce planners (e.g., workforce board staff, chambers of commerce, and governor's office staff) can use supply/demand data to help integrate workforce development and economic development, by identifying the types of training individuals are receiving and by coordinating this training with current and future economic development plans.

OSDS is a planning tool, designed to address problems of structural unemployment (i.e., the mismatch between the skills that job seekers bring to the labor market versus the skills which employers demand). The OSDS helps to identify skill imbalances (that is, skill shortages or surpluses) in the labor market, and thereby helps to guide the training investments of individuals and program planners. By helping to direct the development and expansion of structured training programs to address skill shortages, the OSDS also serves as an important economic development tool by which workforce development organizations such as One-Stop Centers address the critical labor inputs of industries and firms.

Furthermore, the occupational/industry employment profiles presented in the OSDS help job developers specify the industries (and indirectly the firms) which have the largest numbers of workers on the payroll in the occupations of interest to job seekers. These industries and businesses will eventually have job openings due to replacement needs, if not growth. The OSDS occupational/industry employment distributions assist in the identification of industries and companies to contact about employment opportunities. In this manner, the OSDS shortens job search time and reduces frictional unemployment (that is, the time required to learn which employers are hiring workers for occupations of interest, complete resumes, submit applications, interview, and get hired).

2. What is the supply of labor?

The supply of labor is the total of all those who are working (that is, the employed workforce), the unemployed population actively seeking work, and new entrants into the labor market (including training program completers), plus the net occupational and geographic transfers, and returning military veterans.

3. What supply data are included in the OSDS?

The OSDS contains three principal types of supply information. As part of the human resource accounting model, which compares occupational employment projections with occupational licensing and related training data, the OSDS includes detailed training program completion data at the 6-digit Classification of Instructional Programs (CIP) level for structured training programs of 300 or more class hours. Further, the OSDS displays newly issued and active occupational licensing data and information. In addition, the occupational supply demand system includes occupational wage data over time, which provide summary indicators after both the supply and demand actors have made their respective moves in a dynamic, occupational labor market.

4. What supply data are NOT included in the OSDS?

Short-term training programs of less than 300 class hours are generally not included in the training program completion data. Private proprietary schools offering these short-term programs (e.g., real estate, travel, and cosmetology) generally do not report to the National Center for Educational Statistics.

5. What is demand?

The demand for workers in the economy stems from employers' need for labor to produce goods and services. As this need fluctuates, so does the amount of labor demanded. Demand is estimated though occupational estimates of current employment and projections for future job openings due to growth and replacement needs.

Industry growth (or decline) is one component of demand, created by new businesses or the expansion of existing businesses. The other component of demand is the need to replace workers who leave the labor force (including deaths and retirements), migrate to another area, or transfer to a different occupation.

6. What demand data are included in the OSDS?

The detailed industry and occupational employment estimates and projected employment levels and job openings used in the OSDS come from the national and state Occupational Employment Statistics (OES) and the industry/occupational (I/O) matrix, as developed by the U.S. Bureau of Labor Statistics (BLS) and the affiliated, state Labor Market Information (LMI) Bureaus. Basically, at the national level, the BLS assumes a full-employment economy in the projected year and uses econometric models and survey data to break out the detailed labor requirements by industries and occupations of the projected, full-employment national economy. The national projections of industry and occupational employment are used by state LMI Bureaus as important determinants of the corresponding state industry and occupational employment levels and job openings.

7. The data in the OSDS are provided at the state and national levels. Are there concerns about comparing occupational supply and demand at the state level given that individuals may seek employment in a state other than where they were educated?

Individuals may search for and locate jobs in a state other than the state where they receive their postsecondary education. Worker mobility occurs from state to state and internationally. Research has shown that individuals with a bachelor's degree or higher tend to be more mobile when looking for employment. In general, the state level is the correct geographic unit of analysis for sub-baccalaureate training data. For baccalaureate and above graduates of structured training programs, their higher geographic mobility rates require the use of the nation as the geographic unit of analysis.

8. What are Units of Analysis?

Units of Analysis are groups (clusters) of related occupations and structured training programs that approximate occupational labor markets. The grouping of occupations and their job openings and related training programs and their graduates (completers) allows demand data to be compared to institutional supply information from education and training programs. The relationship between training programs and occupations is not always a one-to-one relationship. A single training program can be related to more than one occupation; and, conversely, entrants into an occupation may come from several training programs.

Units of analysis also have geographic characteristics. The appropriate unit of analysis may be national, because of high geographic mobility (e.g., for baccalaureate and above-related occupations), or state and local labor market areas for sub-baccalaureate occupations with low geographic rates of mobility.

There are three different types of clusters in the national units of analysis. These cluster types are identified by the letter A, B, or C at the end of the unit code number:

A clusters are those that are most valid for supply/demand analysis, as the occupations for the most part require formal educational training in one of the related programs.

B clusters are those where the related programs train for the occupations in the cluster, but formal educational preparation is not required for entry into the occupations, and may not be the most common source of potential supply.

C clusters contain only programs alone, or occupations alone, and do not have any supply/demand matching.

9. What is the Standard Occupational Classification (SOC) coding system?

The SOC is the basic occupational coding taxonomy used by all federal statistical agencies, and affiliated state statistical agencies, for the purpose of collecting, calculating, or disseminating occupational data. All workers are classified into one of over 820 occupations according to their occupational definition.

10. What is the Classification of Instructional Program (CIP) coding system?

The CIP is a coding scheme for secondary and postsecondary instructional programs developed by the National Center for Education Statistics of the U.S. Department of Education. The CIP taxonomy is the accepted federal government statistical classification standard for instructional programs and is used in a variety of education information surveys and databases.

11. What are Career Clusters?

Career clusters are groupings of occupations that are aggregated, because workers in these career areas share similar interests and strengths. Each cluster includes numerous occupations that require varying degrees of education and training. The National Association of State Directors of the Career Technical Education Consortium identified the 16 Career Clusters used in the OSDS.

12. How is the OSDS related to O*NET?

The OSDS utilizes the Standard Occupational Classification (SOC) taxonomy in its classifications of occupations. The O*Net codes incorporate the SOC codes and provide additional detail about skill requirements and occupational characteristics.

13. How does the OSDS handle double majors?

The training data included in the OSDS come from the Integrated Postsecondary Education Data System (IPEDS). Postsecondary, educational institutions report to IPEDS the number of degrees and certificates awarded. If an individual has a double-major, and therefore receives two degrees, he or she is counted as a program completer for their primary degree program.

14. Are distance learning programs included in the OSDS?

Distance learning graduates are counted along with other graduates in specific programs. If a student attends a school in a state other than where he or she resides, and either through distance learning or commuting, finishes the program, the student is counted as a program completer by the school they attended.

15. What are human capital or training investments?

In this case, people are considered assets that yield income and other useful outputs over long periods of time, similar to a financial investment, through expenditures on education, training, and medical care. These expenditures are investments in human capital.

16. What is the difference between the OSDS and the Eligible Provider List?

The Workforce Investment Act (WIA) eligible provider list refers to training programs and educational institutions eligible to receive WIA monies for training services provided to WIA clients. In contrast, the Occupational Supply/Demand System (OSDS) provides labor market information with which to guide training investments to improve the economic returns of these investments, in terms of higher wages and greater job stability.

17. In the national and state benchmarks for wage trends (all occupations), what is the statistical significance of the mean wage relative standard error (RSE)?

As described by the U.S. Bureau of Labor Statistics (BLS), “The relative standard error (RSE) is the standard error expressed as a percent of the estimate. It can be used to calculate a ‘confidence interval’ around a sample estimate.” As BLS explained further: “Sampling errors occur because observations come only from a sample and not from an entire population. The sample used for this survey is one of a number of possible samples of the same size that could have been selected using the sample design. Estimates derived from the different samples would differ from one another. A measure of the variation among these differing estimates is called the standard error or sampling error. It indicates the precision with which an estimate from a particular sample approximates the average result of all possible samples. The relative standard error (RSE) is the standard error divided by the estimate. . . The standard error can be used to calculate a confidence interval around a sample estimate. As an example, table 1 [see source reference below] shows mean hourly earnings for all workers of $19.29 per hour and a relative standard error of 1.2 percent for this estimate. At the 90-percent level, the confidence interval for this estimate is from $18.91 to $19.67 ($19.29 x 1.645 x 0.012 = $0.3808, rounded to $0.38); ($19.29 – 0.38 = $18.91; $19.29 + 0.38 = $19.67). If all possible samples were selected to estimate the population value, the interval from each sample would include the true population value approximately 90 percent of the time.” Source: U.S. BLS, Bulletin 2590, September, 2007, National Compensation Survey: Occupational Earnings in the United States, June 2006, footnote 2 Table 1, and Appendix A: Technical Note, Data Reliability.

18. What is the difference between the traditional, National Consumer Price Index (CPI) and the National Chained Consumer Price Index for All Urban Consumers (C-CPI-U) used in the national and state benchmarks for wage trends (all occupations)?

The U.S. Bureau of Labor Statistics (BLS) explains the difference in the following manner: “The C-CPI-U employs a formula that reflects the effect of substitution that consumers make across item categories in response to changes in relative prices . . . Traditionally, the CPI was considered an upper bound on a cost-of-living index in that the CPI did not reflect the changes in consumption patterns that consumers make in response to changes in relative prices.” Source: U.S. BLS, Consumer Price Index Frequently Asked Questions about the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), at http://www.bls.gov/cpi/cpisupqa.htm.