The growth of information workers in the US economy, 1950-2000: the role of technological change, computerization, and structural change

Using data from the decennial US Censuses of 1950, 1960, 1970, 1980, 1990, and 2000, I construct matrices of employment by 267 occupations and 64 industries and then aggregate the occupations into four categories: (i) knowledge producers; (ii) data processors; (iii) service workers; and (iv) goods-processing workers. I find that information workers (the sum of the first two categories) increased from 37% of the workforce in 1950 to 59% in 2000. Then, using an input-output decomposition analysis, I find that the growth in information workers was driven not by a shift in tastes toward information-intensive goods and services (as measured by the composition of final demand) but rather by a roughly equal combination of the substitution of information workers for goods and service workers within the structure of production of industries and the unbalanced growth effect (from differential rates of industry productivity growth). Finally, on the basis of regression analysis, I find that R&D expenditures and computer investment are positively associated with the growth in knowledge workers but negatively associated with the growth of data workers.