Federal Spending 

and Scientist 

and Engineer 

Employment

BULLETIN 1663

U.S. DEPARTMENT 

OF LABOR 

Bureau of 

Labor Statistics

1970

Dayton & Montgomery Co,

Public Library

OCT i 9 I97Q

DOCUMENT COLLECTION

L ft., 3 :

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Federal Spending 

and Scientist 

and Engineer 

Employment

A Study 

in Measurement

BULLETIN 1663

U.S. DEPARTMENT 

OF LABOR

J. D. Hodgson, 

Secretary

BUREAU OF

LABOR STATISTICS

Geoffrey H. Moore,

Commissioner

1970

V

Digitized for FRASER 

For solo by the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402 • Price 50 cents

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Preface

Recognizing the need for an assessment of Federal Government expenditures on 

the demand for scientific and technical personnel, the National Science Foundation provided financial support to the Bureau of Labor Statistics (BLS) to study 

methods of measuring this effect. BLS hired Dr. Robert L. Aronson to carry out 

the study during his leave of absence from the School of Industrial and Labor 

Relations, Cornell University. Dr. Aronson was encouraged to express his professional judgment in carrying out the study. Therefore, points of view or opinions 

stated in this report do not necessarily reflect official opinions of either the Department of Labor or the National Science Foundation.

The number of persons in various public and private organizations who provided 

assistance or counsel to Dr. Aronson during this study is too large to identify in all 

cases. For their help, special mention is acknowledged to Roger W. Jones, Michael 

March, and Carey P. Modlin, all of the U.S. Bureau of the Budget; Murray Weidenbaum, formerly of the Department of Economics, Washington University; Allen O. 

Gamble, National Institutes of Health; Leonard Lecht, Center for Priority Analysis, 

National Planning Association; and Paul Downing, U.S. Department of Defense. 

Various members of the staff of BLS provided technical assistance, including Neal H. 

Rosenthal, Michael F. Crowley, and Daniel E. Hecker, of the Division of Manpower 

and Occupational Outlook; Thomas Fleming and Richard P. Oliver, of the Division 

of Economic Growth; and Douglas Schmude and Edith Andrews, of the Division of 

Occupational Employment Statistics.

Robert Cain and Norman Seltzer of the Sponsored Surveys and Studies Section, 

National Science Foundation, were instrumental in shaping the goals and direction 

of the study and in providing general counsel and assistance.

m

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Contents

Chapter: Page

I. Introduction and Highlights ..................................................................................... 1

II. Government Programs and the Measurement of Manpower Requirements 3

The concept of Federal manpower requirements ........................................ 3

The elements of a model ....................................................... ........................... 4

Data sources: Expenditures and manpower .................................................. 7

Approaches to the measurement of Federal employment support ...............10

III. Extramural Employment of Scientists and Engineers in Federal

Programs: Budget Approach ...............................................................................11

Estimating extramural employment in Federal programs .............................11

Estimates of extramural employment in Federal programs............... ...........12

Evaluation of the budget approach .....................................................16

IV. Extramural Employment of Scientists and Engineers in Federal

Programs: Interindustry Transactions Approach ............................................... 17

Elements of the interindustry transactions approach ..................................... 17

Extramural employment of scientists and technicians ...................................20

Evaluation of the interindustry transactions approach...................................22

V. Scientists and Engineers in the Federal Government ....... ..................................... 25

Recent trends in Federal scientist and engineer employment .......................25

Intramural occupational employment patterns ............................................. 26

Government scientists and engineers in Federal programs.............................26

Data gaps in Federal Government employment statistics .............................27

Summary and evaluation .................................................................................28

VI Total Federal Effect and Implications for the Scientific and

Technical Manpower Information System .......................................................29

The total effect of Federal programs on employment ................................... 29

Applying the estimates.......................................................................................31

Evaluation and Recommendations ...................................................................36

Table:

1. Sources of information on the employment of scientists and engineers

in the United States, by selected characteristics ........................... .................... 9

2. Estimated extramural employment of scientists and engineers employed

in Federal programs, selected agencies, 1966 ........................................................13

3. Estimated extramural employment of R&D engineer-scientists on

Federal programs by selected agency and performer, 1966 .................................14

4. Percent distribution, extramural R&D employment of scientists and engineers

on Federal programs, by selected agencies and performer, 1966 .......................14

5. Implicit performer cost-ratios, extramural R&D scientists and engineers

in Federal programs, selected agencies, 1966 ...................................................... 15

6. Total and federally supported extramural employment of scientists

and engineers, selected performers, 1966 .............................................................15

7. Estimated employment of scientists and engineers supported by

Federal funds, by type of employer, 1965 .......................................................... 20

8. Federally supported employment in selected scientific and technical occupations

as a percent of total occupational employment, private industry, 1965 .............21

9. Percent distribution of scientists and engineers in private industry,

selected occupations, by source of support, 1965 ..........................................22

10. Industrial distribution of estimated total employment,

by expenditure source, 1965 ............................................. .................................. 22

11. Industrial distribution of estimated engineering employment,

by source of support, 1965 .................................................................................... 23

12. Industrial distribution of estimated scientist employment,

by source of support, 1965 .................................................................................... 23

v

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Contents— Continued

Table— Continued: Page

13. Total civilian employment and scientists and engineers, Federal

executive branch 1951-65 ............... ............................... .............................. 25

14. Total and Federal intramural scientists and engineers,

selected years, 1951-65 ................................................ ......................................... 26

15. Total and intramural employment of scientists and engineers,

selected occupations, 1965 ............. ......... ......... ..................................... ............ 27

16. Percent distribution of agency white-collar employment in the Federal

Government, by program, selected agencies October, 1967 ................. .....28

17. Civilian scientists and engineers in the Federal Government,

by program, October 1966 ................................... ............................... ................ 28

18. Estimated Federal utilization of scientists and engineers,

selected programs, 1966 ..................... .......... ....................................................... 30

19. Estimated employment of scientists and engineers, by source

of support and sector, 1965 .......................................................................... 30

20. Federally supported employment as a percent of total employment

of scientists and engineers, 1965 .... .................... .............................................. 31

21. Estimated employment of R&D scientists and engineers, by sector

and source of support, 1965 ..............................................................................31

22. Estimated utilization of federally supported scientists and engineers,

by field of science and sector,1 1965 .................. ................................ 32

23. Estimated total and federally supported employment of scientists

and engineers, by sector and character of work, selected years .......................32

24. Supply and demand for scientists and engineers, 1958-66 _______ ____ ______ 33

25. Estimated employment of scientists and engineers per billion dollars

of expenditures in defense programs, private industry,

and Federal Government, 1965 or 1966 ....................... ......................... ............ 35

26. Estimated percent of scientists and engineers on Federal work,

by selected sources of estimates .............................................................................36

Appendix:

A. A note on program planning and manpower requirements ______________ _____41

B. Estimated total employment and employment attributable to Federal Purchases

of goods and services, by source of procurement and industry, 1965 .............42

C. Estimated federally supported extramural employment of scientists and engineers

by State and local governments, selected occupations, 1965 _______ __________44

D. Discrepancies between time series employment estimates

and occupational matrix estimates ............... .......... ..... ..... ...... ...................45

E. Estimated scientists and engineers employed in the Federal Government,

selected occupations, by program, October, 1966 ...............................................46

v i

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
FED ER A L SPEN D ING AND SC IE N T IST AND EN G IN E ER EM PLO YM EN T

Chapter I. Introduction and Highlights

Relatively large amounts of information on scientific 

and technical manpower in the United States have 

been collected for nearly two decades. In terms of the 

numbers employed, the industries and institutions involved in their employment, the sources of supply, the 

nature and character of their work, their education, 

training and mobility, perhaps no other group of occupations has been subjected to as much continuous and 

detailed observation. Curiously, however, the apparent 

richness of the sources of data has not been accompanied by a substantial body of research directed to 

increased understanding of the employment and utilization of scientific and technical manpower.

The influence of the Federal Government on the 

employment of scientific and technical manpower deserves more than the casual speculation it has thus 

far received, because of the degree in which the Government uses scientific and technical knowledge in its 

programs; and has generated substantial social and 

economic interest because of its policy implications.

The kinds of scientific and engineering talents engaged in Government-supported programs may have 

a major, if not preponderant, influence on technological development and innovation. The technological choices made by scientists and engineers may have 

intended costs as well as benefits that reach well 

beyond their immediate frames of reference. From the 

economic viewpoint, awareness is also growing that 

scientific and technical manpower devoted to one set 

of uses, such as Federal programs of research and development, implies the sacrifice of other socially useful 

opportunities for their employment. In the absence of 

a market mechanism for rationing this scarce manpower resource, as is typically the case in public programs, other means of evaluating its deployment wall 

need to be developed.

The study objectives focus on a single question: 

How useful are the available sources of data on scientific and technical manpower for measuring the effects 

of Federal programs on employment of scientists and 

engineers?

Some data sources already include source of support 

as an explicit dimension, but the occupational, character of work, and institutional coverage of these

sources is incomplete or inadequate from an analytic 

viewpoint. Consequently, the principal effort of the 

study became directed principally towards deriving 

approximate measures of Federal influence on the 

employment of scientists and engineers, especially in 

respect to those dimensions not presently covered by 

survey design.

A major conclusion of this study is that existing 

sources of data on Federal expenditures and on scientific and technical manpower can provide useful results 

in measuring the program—-employment relationship. 

The results obtained, however, represent only broad 

and approximate relationships. For manpower planning in connection with Federal programs data that 

are more detailed, more precise, and more compatible 

with a variety of analytic measures of activity, will 

be required.

For the most part neither the sources of data nor the 

methods used in this study to test their measurement 

capability are novel. Expenditures per man-year and 

input-output analysis have been used as complementary means of estimating employment attributable to 

Federal spending. Since the latter approach converts 

industrial and occupational coefficients of employment 

into estimates of numbers employed, only the expenditure data used in this approach were unavailable 

through official publications. All other estimates were 

derived from published sources.

The resulting estimates of federally supported employment relate either to 1965 or 1966. At the time at 

which the study was made it was not possible to obtain 

employment and expenditure data which would permit measurement of the government’s influence to a 

comparable extent for later years. In addition to the 

lapse of time between survey dates and the availability 

of the data, certain essential employment and financial 

data are collected independently on different time 

schedules. Comparison of two different approaches to 

measurement, based on independent sources of data, 

further restricted the timeliness of the employment 

estimates. Recommendations which could lead to more 

timely estimates are made in the concluding chapter 

of this report.

Conceptual problems in measuring the Govern1

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
merit’s effect on the employment of scientists and 

engineers and the sources and nature of available manpower and expenditure data are discussed in chapter 

II. Estimates of federally supported employment in 

the extramural sectors are developed and evaluated 

in chapters III and IV. Direct employment in the 

Federal Government itself is the subject of chapter V. 

Chapter VI brings together the results of the three 

preceding chapters, illustrates some applications of the 

resulting estimates of employment, and offers recommendations for changes in the concepts and procedures for collecting data on the employment and 

utilization of scientific and technical manpower.

Highlights

Exploration of the capability of data to estimate the 

effects of Federal programs on the employment of 

scientists and engineers yielded the following results 

and general conclusions:

About 393,000 scientists and engineers, or nearly 30 

percent of the estimated total employed in 1965,1 

derived their employment from Federal funds. Only a 

third of this number were employed directly by the 

Federal Government.

The proportion of federally supported employment 

of scientists and engineers varied markedly. The relative numbers were estimated to be less than 20 percent 

in private industry and in State and local government, 

but were as much as 40 percent of scientist-engineer 

employment respectively, in universities and colleges 

and independent nonprofit organizations.

Federally supported employment of scientists and 

engineers is heavily concentrated in all sectors of 

research and development (R&D). Overall the Federal Government was estimated to employ about 55 

percent of R&D scientists and engineers in 1965; only 

about 5 percent of non-R&D scientists and engineers 

were employed in Federal programs.

Defense and space programs in 1966 were estimated

to employ nearly 80 percent of scientists and engineers 

in the extramural sectors. More than half of Government civilian scientists and engineers were also employed in those programs.

Federal employment of engineers in 1965—66 exceeded the employment of scientists. However, in 

terms of total scientist and engineer employment, a 

greater proportion of scientists than engineers were 

employed in Federal programs. Federal utilization was 

greatest in the life sciences.

Measures of federally supported employment developed in this study indicated that in the late 1950’s 

and early 1960’s annual increases in Federal program 

requirements equaled about 25 percent of the average 

annual number of bachelor’s and first professional 

degrees conferred in the sciences and engineering.

The foregoing estimates of federally supported employment of scientists and engineers and some illustrative applications indicate that currently available data 

sources have a useful but limited capability for measuring the employment effects of Federal programs. 

However, the estimates of employment were possible 

only on the basis of rather broad assumptions about 

the relationship of employment and Federal expenditures.

Data on output and expenditure in Federal programs were found to be weaker than employemnt data 

in most of the dimensions investigated.

The general strategy for developing data adequate 

for scientific and technical manpower planning in 

Federal programs should be improvement of existing 

data sources rather than development of a single 

integrated data system. Greater coordination and 

compatibility among the sources of employment and 

expenditure data, buttressed by periodic benchmark 

surveys of Federal involvement, should satisfy most 

needs for m anpower planning in Governm ent 

programs.

1 Latest data available at time of this study.

2

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Chapter II. Government Programs and the Measurement of Manpower Requirements

The conceptual basis for measuring Federal requirements for scientific and technical manpower is 

essentially similar to the general basis of manpower 

measurement. The underlying concept of all such 

efforts is that a functional relationship exists between 

the output of goods and services and the numbers of 

workers employed. Where public goods and services are 

involved, technical and institutional factors may require 

some modification in the design of the information 

system used to capture and analyze the relationship 

between output and manpower. Elaboration of the 

foregoing statement as background to the efforts at 

measurement attempted in this study is the purpose 

of this chapter.

The concept of Federal manpower requirements

Governments use manpower for the same general 

purpose as other organizations and economic sectors 

— to produce goods and services. Just as in the general 

case, the Government sector has a production function 

relating the quantity of goods and services produced 

and the quantities of resources used, including the 

numbers of scientists and engineers. The production 

function for each uniquely identifiable output of goods 

or services, that is, a particular Government program, 

will differ from the production functions for other 

Government programs. Such functional relationships 

will also differ from those for other economic outputs, 

such as those purchased in the markets for private 

goods and services. Further, it is reasonable to assume 

that manpower requirements to serve Government 

programs are subject to dynamic influences more or 

less common to those occurring in other economic 

sectors. Technological change, changes in the supply 

and prices of cooperating factors of production, and 

changes in the composition of output resulting from 

changes in purchasers’ preferences affect the supply 

of public as well as private goods.

The application of the concept of a production 

function to public programs, however, raises some 

special difficulties which affect the measurement of 

manpower requirements. First and foremost is the 

concept of output as applied to public goods and services. In a number of areas of Government activity, 

especially in the domain of the Federal Government,

the output of public programs is objectively unmeasurable. The most obvious instance is the national defense 

and security. No apolitical means has been found for 

determining whether security from attack, or offensive 

capability, is increased or decreased by a particular 

level or mix of armaments and military manpower.2 

Similar difficulties of concept arise in other areas, 

although perhaps not to be same degree, such as in 

space exploration, the development of nuclear energy, 

and in the more traditional functions of Government 

such as education or the maintenance of internal law 

and order. In some other areas, such as transportation, 

the delivery of mail, and certain health services consumed directly, the concept of Government supply is 

both more easliy recognizable and quantifiable.

The difficulty posed in the foregoing is especially 

decisive in projecting the levels and changes in the 

levels of output and employment associated with 

public goods and services. Although far from completely adequate, the private sector experience tends 

to support the theory of a functional relationship 

between changes in expenditure, output, and employment. This relationship can be roughly determined 

from economic models relating the growth and composition of the labor force, productivity, rates of consumption and investment, and so on, to changes in 

gross national product and, especially, to changes in 

the demand for goods and services in particular industries. Such models often provide the means for determining manpower requirements, although they are 

usually implicit in manpower forecasts.3 A functional 

model of the demand for Government output, on the 

other hand, has yet to be devised, largely because the 

factors that determine such a demand are mediated 

through a political mechanism. Except in a few cases 

involving Government enterprises, no market can be 

shown for Government output, and consequently no 

determinate relationship exists between the “ price”

2 The evaluation of the “quantity” of security depends on

factors such as the military posture of other countries, the

political situation, the availability of technical means, etc., as

perceived by military and diplomatic intelligence and as

interpreted by the executive and legislative branches of

Government.

3 For example see T h e L o n g -R a n g e D e m a n d fo r Scien tific

a nd T ech n ica l P erso n n el, National Science Foundation,

(NSF, 61-65, 1961).

3

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
of such output, expenditure, and the quantities demanded. The absence of output measures also makes 

difficult forecasting whether or not changes in expenditure on Federal programs will result in corresponding 

changes in employment. An increase in expenditure in 

a program area may represent an increase in program 

activity or output. Unlike goods and services produced 

in the private sector, however, practical means of distinguishing increases in real output from rises in unit 

resource costs are rare in Government programs.

Two methods of dealing with this issue can in 

principle be devised. One is to develop quantifiable 

measures of program achievement, such as those contemplated as part of the Planning-ProgrammingBudgeting System (PPBS)4 or in the recent National 

Planning Association study of the costs of social goals.5 

The other method is to deflate program expenditures 

of real resources used, such as manpower. The methods 

used in this study out of practical necessity are more 

closely related to the second possibility. As will be seen 

later, this study is based on the assumption that 

program expenditure equals program output; this 

measure has been related to employment by means of 

a common dollar denominator.

In approaching the measurement of manpower 

requirements for Federal programs as a practical problem, account must also be taken of the institutional 

and organizational complexities. The principal institutional fact is that the Federal Government operates 

in a so-called “pluralistic economy.” 6 The Government 

engages in direct production of its output only to a 

limited extent, partly as a matter of tradition and 

partly as a matter of economic and political strategy. 

A substantial, if not a major part of its total output is 

achieved through employing other sectors, from which 

the Federal Government purchases goods and services, 

or to which it makes grants-in-aid, loans, or subsidies. 

Through these various financial arrangements, other 

economic sectors may be co-opted into Federal programs. Some or all of these other sectors also employ 

each other, through purchase or subcontract, in furthering their own participation in Federal programs. 

Thus, an important objective in measuring scientific

4 For a clear account and analysis of the development and

implications of PPBS, see Charles L. Schultze, The Politics

and Economics of Public Spending, (Washington, D.C.,

Brookings Institution, 1968).

5 Goals analysis is a relatively new field in which measures

of output are largely determined from normative standards.

See Leonard A. Techt, Goals, Priorities and Dollars: The next

Decade (Free Press, New York, 1966) ; and Manpower Requirements for National Objectives in the 1970’s (Center for

Priority Analysis, National Planning Association, Washington,

D.C., 1968), especially pp. 5-7.

6 For an interesting definition of this term and discussion

of its significance see Eli Ginsberg, Dale L. Hiestand, and

Beatrice G. Reubens, The Pluralistic Economy (New York,

McGraw-Hill, 1965).

and technical manpower requirements in Federal programs is to determine the sectoral distribution of these 

requirements.

The organizational structure and processes of Federal decisionmaking further complicate the treatment 

of the Government’s manpower requirements as functional entities. The basic organizational structure for 

both appropriation and administration is departmental, but this arrangement does not necessarily coincide 

with distinctive functions and program goals. Competition among agencies for funds for similar, even 

identical purposes makes it difficult to determine 

the functional distribution of activity. The PlanningProgramming-Budgeting System, gives promise of 

integrated program planning in the Federal Government, but for the near term future at least the assumption that Government programs represent a set of 

possibly overlapping production functions is often 

closer to reality.

The elements of a model

An information system for measuring manpower 

requirements in Federal programs should have two 

broad and related attributes in its design. First, it 

should supply the information necessary to its intended 

uses. Second, it should result in data that more or 

less accurately mirror the structure, processes and 

behavior of the organizational units covered. Although 

these two attributes jointly influence the design of the 

system, their respective influences are probably somewhat different. Purposes will have greater influence on 

the coverage of the system and the kinds of information collected, while the structural-functional character of the organizational units involved will tend to 

govern the concepts, classification schemes, and level 

of detail. The implications of the first of these attributes can be dealt with briefly, since they rest on the 

assumption of a production function and past experience with manpower information systems generally. 

The second attribute, on the other hand, deserves more 

extended consideration, since it involves novel and 

possibly more troublesome elements. Most of the discussion in this section consequently will be devoted 

to the structural and functional elements of Federal 

programs.

A manpower information system for Federal programs, focused either on scientists and engineers or on 

a broader range of occupations, could serve a variety 

of purposes. Such a system could: (1) Permit comparison among Federal programs in terms of the human 

resource and related physical requirements as a basis 

for funding; (2) permit evaluation in like terms of 

either new program activities or changes in existing 

program structures and support levels; (3) provide a 

basis for measurement and evaluation of the adequacy 

of current or future manpower resources to support

4

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
current or projected Federal programs; (4) provide 

a basis for evaluating the influence of Federal manpower utilization on the deployment and compensation of all workers; or (5) permit tracing the flows of 

manpower resources used in Federal programs over 

time and among industries or large regions.

Not all of these purposes need be simultaneously 

satisfied, but they share certain common informational 

requirements. Information would be needed on program outputs, that is, the specific nature and quantity 

of the work in terms of program objectives, to the 

degree to which these can be quantified, and the current or expected total expenditures associated with the 

program activity. Insofar as scientists and engineers 

are concerned, uses (3), (4), and (5) would also 

require that the system be consistent— though not 

necessarily integrated—with a system of manpower 

information covering the non-Federal economic 

sectors.

The structural and functional attributes of a Federal program oriented system of manpower information may be more troublesome for several reasons. 

Some of the difficulties perceived here seem to derive 

from the “information complexities,” 7 inherent in the 

labor markets for scientists and engineers, but others 

may be unique to the nature and functions of the 

Federal Government and to the variety of ways in 

which it gets its work done. Federal programs vary 

greatly not only with regard to their respective objectives, but also—and more importantly with respect to 

manpower requirements—in terms of the means by 

which those objectives are served. A variety of organizational patterns in carrying on Federal programs 

must be accommodated in an information system. 

Finally, programs may vary with respect to their duration, from those with specific timebound objectives to 

those that are continuous and indefinite. Brief discussion of each of these aspects as a conceptual problem 

will help to appreciate the associated informational 

requirements. For the most part they provide the 

framework for a system of Federal manpower planning.

Federal spending covers a very broad and diverse 

spectrum of activities intended to serve purposes that 

have been jointly defined, approved and funded by 

the President and the Congress. The budget documents, for example the Budget for Fiscal 1969, classify 

outlays and expenditures on these activities in two 

principal ways: By administrative agency and by function. For either fiscal planning or analysis of past 

utilization of manpower resources, however, neither 

classification is ideal. Manpower requirements should 

be related to the end products to which they contribute, 

rather than to the channels of employment and financial flows. Since with few notable exceptions, Government programs involve the services of more than a 

single agency or bureau and a number of agencies are 

involved in more than one program, the administrative

classification of either fiscal or manpower inputs would 

not be revealing of the input-output relationship. The 

functional classification scheme employed now for several years, exclusive of expenditures for general government and interest payments, is made up to 10 principal 

categories. Although it is a step in the desired 

direction, the classification still appears to be ex post 

the budgetary decisions rather than an operational 

basis for allocating financial or other resources.8 Comparison of the expenditure totals for education given in 

the main budget document and in the special analyses 

reveals the ambiguity of the present scheme. For fiscal 

1967, the total Federal outlay on education, including 

net lending, given in the functional classification of 

the budget was about $4.0 billion, but Federal expenditure on education in all programs in that period was 

$9.2 billion. The difference between these two concepts presumably is that the first relates to expenditure 

on education as a final output, while the second also 

includes educational expenditures as inputs in support 

of other objectives— defense, for example.9 Conceivably, measurement of manpower requirements could 

be desired for either type of functional classification, 

and the information system should accordingly be 

flexible enough to accommodate both types.

The manpower information system also must comprehend structural differences among programs in the 

ways in which their objectives are met. In addition to 

civilian and military employees of the Federal Government, other program performers include industrial 

and nonprofit contractors, State and local governments 

both as contractors and recipients of loans and grants, 

and various other organizations and individuals who 

receive payments for goods or services. Each of these 

performer groups will generate varying employment

7 The term is that of Allen O. Gamble whose discussion of

the scientist-engineering manpower information system remains the leading work in this too sparse field. See his

“Proposal for Development of An Improved ManpowerRelated Information Program,” Toward. Better Utilization of

Scientific and Engineering Talent (Washington, D.C. National Academy of Sciences, Committee of Utilization of

Scientific and Engineering Manpower, 1964), pp. 106-107.

8 See Joint Economic Committee, Subcommittee on Economic Statistics, The Federal Budget and/or Economic Document (Washington, D.C., 88th Cong., 1st Sess., Report No.

396, 1963), p. 9. Although some progress has been made

toward a genuine program approach, the successes have been

sporadic and mainly at the intra-agency level. See Joint

Economic Committee, Subcommittee on Economy in Government, The Planning Programming-Budgeting System: Progress and Potentials (Washington, D.C., 90th Cong., 1st Sess.,

1967).

9 Whether this distinction is itself valid is questionable. In

The Budget for Fiscal Year 1969, aid for undergraduate and

graduate students in 1967 is shown as $421 million, but in

Special Analysis H, the sum of undergraduate and graduate

and professional student support is $925 million for that year.

No clue in either of these parts of the Budget will explain

this difference.

5

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
requirements for given levels of Federal expenditure, 

depending on the nature of the activity involved. This 

point may be simply illustrated by comparing the percentages of employment in the private sector directly 

attributable to Federal purchases of good and services, 

including the compensation of Government employees, 

in different programs, during the period 1962—66:

(percent)

All Defense— Nondefense

programs atomic energy and space

1962 ........................ 44.6 42.6 50.0

1963 ........ 46.4 41.3 61.9

1964 45.1 41.3 57.9

1965 .................... 43.2 40.3 52.6

1966 ______ 42.7 42.3 47.1

S o u r c e : Manpower Report of the President— April 1968,

appendix table G-4, p. 322.

Finally, the manpower information system must be 

able to discriminate between programs, or program 

elements, that are terminal and those that are continuous in duration. On the basis of recent experience, 

apparently the requirements for scientists and engineers vary with the phases of the program as well as 

with the levels of expenditure involved. Some fragmentary evidence of considerable variation may be 

found in studies of the development of the Titan II 

intercontinental ballistic missile and of a computerized 

Navy command and control system. In the latter case, 

for example, the engineering work force engaged on 

the project varied over a 6-year period from 8 to 16 

percent of the total engineering force at the contract 

facility. Unfortunately, no data are given to indicate 

the changes in the total engineering complement, but 

the engineers employed on the computer contract increased more than sevenfold over the entire contract 

period.10

On the other hand, some activities of the Federal 

Government are open ended fiscal commitments, but 

with manpower coefficients that tend to be comparatively stable over time. Few such programs, however, 

currently are large users of scientific and technical 

manpower.

From this background it is now possible to indicate 

the components and characteristics of a manpower 

information system for Federal programs, focusing on 

scientific and technical occupations. This “model” is 

appropriately discussed under the following headings:

10 Paul W. Cherington, “Case Studies of Titan II and

NTDS,” Toward Better Utilization of Scientific and Engineering Talent: A Program for Action (Washington, D.C.,

National Academy of Sciences, Committee on Utilization of

Scientific and Engineering Manpower, 1964), pp. 127-128.

11 Planning-Programming-Budgeting: Bureau Guidelines of

1968 (U.S. Senate, Committee on Government Operations,

1968).

12 Ibid.

(1) Program concepts, (2) program performers, (3) 

manpower and financial data, and (4) responsibility 

for data collection and frequency of reporting.

P r o g r a m c o n c e p ts . In general, the manpower information system should discriminate between groups of 

activities each of which represents a common objective 

or end result. The activities to be included in any 

given program category, therefore, should be determined by the contribution of the activity to the purpose of the program, and not by the similarity of 

specific functional characteristics. Thus, for example, 

employment on school construction designed to improve the quality or adequacy of public education 

should be classified as an element in an educational 

program rather than as a public works activity, even 

though it also might be undertaken to achieve the 

purpose of a public works program.

The classification of any given activity (or closely 

related set of activities), accordingly, cannot be established by treating it as an isolated phenomenon. 

Although each specific case of classification may present special problems of definition, a general test of 

where an activity belongs might be the response to the 

question of complementarity: Will the objectives or 

goals of the program be achieved in the absence of 

this particular activity? An affirmative answer, of 

course, implies either that the activity belongs in some 

other program category or is per se questionable as a 

Government program. Such a test does not preclude in 

the course of time changes in program activities, either 

because objectives are reformed in the light of changing conditions (including the effects of the programs) 

or because new techniques of achieving program objectives come to light. Indeed, one of the major objectives of a program classification is to facilitate rational 

analysis of such factors.

For analytical reasons, especially for assessing manpower requirements and evaluating performance, 

activities should be grouped into so-called “program 

elements.” Bureau of the Budget guidelines for the 

Planning-Programming-Budgeting System11 define a 

program element in terms of its characteristics—a 

“clearly definable output,” an end product for the 

operating agency, rather than an intermediate product; and output varying, though not proportionally, 

with changes in inputs.12

P r o g r a m p e r fo r m e r s . Public programs in the Federal 

Government are served in a variety of ways. A manpower information system should reflect and cover the 

different organizational forms involved, not only because of differences in the nature of their relationship 

to the Federal Government, but also because differences in cost, manpower utilization, and program effectiveness may be involved. Thus, the system should 

comprehend not only the leading Federal agencies

6

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
directly involved in program management and operations, but also all other major units supplying inputs 

to the program: Businesses and industries, other Federal agencies, other governments, and nonprofit and 

educational institutions. In addition, because each of 

these organizations purchases inputs used to supply 

Federal program output, measurement of the manpower indirectly hired is also desirable.

D a ta r e q u ir e m e n ts. The assumption is that data collected by a manpower information system will be used 

for analytical purposes; projection of occupational 

requirements for scientific and technical personnel may 

be the most important purpose. For this and most 

other conceivable uses, the minimum data requirements would include: 13

1. Total program employment broken down by program element and by type of performer.

2. Scientists, engineers, and supporting technical

personnel employed by each program element and corresponding performer, broken down by occupational

specialty.

3. Information on (2) with respect to the functional or

character-of-work assignment of the individuals employed.

4. Total expenditure or costs for each program

element, distributed among personnel, equipment and

facilities, materials, and overhead expenses.

5. A measure of the real output of the program

element.

None of the above data requirements is free of difficulties of definition. Among the more troublesome is 

the question of occupational classification. Any such 

scheme, no matter how fine grained, is inherently 

arbitrary when measured against the adaptability of 

trained men and women to a variety of tasks. Even 

training in those scientific and technical fields which 

require long periods of formal education in particular 

disciplines and technologies has not been particularly 

restrictive when new tasks and requirements have 

emerged. The design of an occupational classification 

scheme that will fit the great variety of tasks performed by scientific and technical manpower clearly 

should have a high priority.

A d m in is tr a tiv e r e sp o n sib ility a n d f r e q u e n c y o f r e ­

p o r tin g . Although congruence between program and 

organizational structures in the Federal Government is 

not necessary, for most of the existing program categories one agency is dominant, and administrative and 

operating responsibility probably is more concentrated 

at the program element level. Administration of a 

scientific and technical manpower information system 

similarly could be decentralized by following the dominant agency principle; the appropriate bureaus or 

divisions would be responsible for data collection and 

reporting within a common informational framework. 

Tabulation and analysis beyond the level of agency or

particular program need, however, could be left to an 

organization with overall responsibility and interest in 

scientific and technical manpower resources.

Frequency of reporting depends on the use of the 

data, and may be affected by the nature of the program. Programs with substantial expenditure and 

manpower weights in the scientific and technical areas 

may require more frequent monitoring than those programs that use relatively little of such input. Likewise, 

programs with major short term fluctuations in requirements suggest the need for a greater frequency 

of reporting than programs that change more slowly 

and predictably. A mixed system of data reporting 

seems indicated. Comprehensive bench mark data 

could be collected on all programs at common reporting dates, and more frequently programs of selected 

interest and, probably, of major importance.

Data sources: expenditures and manpower

As an empirical matter, whether or not the effect of 

Federal programs on the employment of scientific and 

technical manpower can be measured depends on the 

nature of the data available. In the course of this study 

all of the major data sources were reviewed and their 

characteristics examined in terms of the needs outlined 

in the preceding section. None of these sources either 

jointly or as independent data systems, of course, completely satisfies the needs of an ideal system with the 

capability of measuring the manpower requirements of 

Federal programs. Some of the sources do address the 

issue of Federal influence directly, but others, as will 

be shown subsequently in chapters III, IV, and V may 

provide more meaningful results.

Discussion of data sources may conveniently be 

organized in the following categories: (1) Measures 

of program activity and output, (2) expenditure and 

costs, and (3) employment. Particular sources of data 

in some cases overlap these categories, so that repetition is unavoidable. Most of the sources are available 

in published form, although not all data collected in 

the established information programs are published.

M e a s u r e s o f p r o g r a m a c tiv ity a n d o u tp u t. M ea'ures 

of program activity and output in the Feder**1 Government are still in the early stage development. 

However, the stimulus to this development given 

by President Johnson’s August 1965 directive to install 

the Planning-Progra^iming-Budgeting System on a 

Government-wide basis has resulted in some progress. 

S p e c ia l A n a lysis R , in th e B u d g e t, F isca l Y e a r 1 9 7 0 14

for the first time since the President’s directive provides 

a review and analysis of the programs of 17 Federal

13 These proposed data requirements lean heavily on the

discussion by Gamble, op. cit.

1 4 S p ecia l A n a lyses, B u d g et o f th e U n ite d S ta tes, Fiscal

Y ea r 1 9 7 0 (Washington, D.C., 1969) pp. 252-273.

7

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
agencies, covering about 95 percent of the proposed 

budget, in detailed terms.15

The data presented are in financial terms, although 

in some cases there is a statistical as well as a narrative 

account of the activities to be undertaken. In other 

parts of the 1970 budget, and also in the budgets for 

earlier years, program activities are presented for a 

smaller number of selected programs and agencies in 

terms of both outlays and services provided.16

Comprehensive measures of program output nevertheless are still poorly developed, and indeed for a 

number of federally supported programs the prospect 

of such measures seems remote. For Government as a 

whole, output in the national income accounts is 

expressed in value terms as roughly equal to the sum 

of the cost of employee services and the value of 

Government purchases of goods and services.17 Because 

of the aggregation problem, progress toward rea l measures of total Government output is unlikely in the 

near future. In some particular agencies, however, 

efforts to measure physical output as a management 

tool for evaluating agency performance have begun. 

In addition to a limited experiment in selected agencies,18 all of which confined the measure of input in 

the productivity equation to in-house employment, a 

few agencies regularly collect and tabulate data on 

their programs, which includes extramural employment as well as corresponding measures of output. The 

Atomic Energy Commission, for example, uses scientific publications as a partial measure of output in its 

Physical Research Program; the scientific man-years 

involved as well as the associated financial outlays are 

reported.19 The Atomic Energy Commission, on a 

broader basis, also projects manpower requirements in 

the atomic energy field, mainly on the basis of expenditure plans and projections. Few other agencies as yet 

attempt such measures of program output, although 

progress is being made in the development of program 

memoranda for PPBS presentations. In research and 

development, where Federal support and utilization 

of scientific and technical manpower is heavily concentrated, general measures of output may be practi15 Ibid, p. 254.

• P- 157. For example, hospital and medical services,

for which tn^ number of patients treated and the number of

clinic and physics n visits are indicated along with dollar

outlays.

17 See U.S. Department o£ Commerce, Office of Business

Economics, National Income, 19a-t edition (1954).

18 Measuring Productivity of Federal Government Organizations (Office of the President, Bureau of the Budget, 1964) ;

also, William A. Vogeley, A Case Study in the Measurement

of Government Output (Rand Corp., 1958).

19 A Statistical Summary of the Physical Research Program

(U.S. Atomic Energy Commission, June 30, 1968).

20 Nestor E. Terleckyj, Research and Development: Its

Growth and Composition (New York, National Industrial

Conference Board, 1963), pp. 11-12.

cally unattainable because of the problematic outcome 

of R&D effort.20

E x p e n d itu r e a n d cost d ata . In the absence of adequate real measures of program output, data on 

expenditure must serve as a proxy in measuring manpower requirements. Indeed, this may be the only 

general basis for estimating employment attributable 

to Federal support, and extensive use has been made of 

financial data in this study. Such a basis, however, is 

beset by numerous risks in interpreting results, because 

of cost differences in the character of work, fields of 

science, and the practices of performing organizations. 

The greater the detail available, the more likely the 

manpower estimates will approximate reality.

Two general sources and several more specialized 

sources of financial data can be used in equations for 

estimating federally supported employment of scientists and engineers. The most general, of course, is the 

B u d g e t o f th e U n ite d S ta tes. This document, which 

records both outlays and proposed expenditures, covers 

the total of Federal spending on a fiscal year basis. 

Expenditures are tabulated both by agency and by 

broad functions and program. A derivative and companion source to the Federal budget is the annual 

survey, F e d e r a l F u n d s fo r R e s e a r c h , D e v e l o p m e n t a n d

O th e r S c ie n tific A c tiv itie s , sponsored and conducted 

by the National Science Foundation. F e d e r a l F u n d s

provides expenditure data on Federal support of 

research and development, R&D plant, the collection 

of scientific data, and the communication or storage 

of scientific information. R&D support data are broken 

down by character-of-work, fields of science, performer, and by sponsoring or administrative agency. 

In addition, for major features of Federal support each 

volume of F e d e r a l F u n d s contains historical series 

from 1952 onwards.

Although presently of limited use in estimating 

federally supported manpower requirements, data on 

Federal support to higher education is available in the 

CA SE 21 series, which provides information on an 

institutional basis in support of academic science and 

nonscience activities. An expanded CASE program is 

expected to cover additional sponsoring agencies and 

to provide information on a project basis, including 

the utilization of manpower.

Expenditure and some cost data are available from 

National Science Foundation surveys of scientific and 

technological activity in four sectors— industry, universities and colleges, State Governments, and nonprofit 

institutions. The industry survey has been conducted 

annually since 1957, but surveys in the other three 

sectors have been irregular or less frequent. Two of 

the surveys— the surveys of the colleges and universities and of the nonprofit institutions— also provide 

considerable information on federally Funded Re8

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
search and Development Centers administered by the 

institutions.

At to expenditure data useful for estimating federally supported employment of scientists and engineers, 

all four surveys publish data on the sources of support 

for research and development. Only two— the industry 

and the nonprofit institution surveys— provide specific 

estimates of man-year costs of scientists and engineers, 

however. All four surveys provide distributions of 

expenditure by field of science. Only one of the surveys— the university and college survey— includes some 

expenditure data on non-R&D activities in academic 

science fields.

Employment data. Development of employment 

data on scientific and technical manpower has been 

extremely prolific, possibly exceeding that of any 

other specialized occupational group. In the course 

of this study more than 14 sources were investigated.22 

Eight of the surveys include specific information on 

federally supported employment. Some, as in the case 

of the NSF sectoral surveys, report employment and 

expenditure data together, while others cover only 

employment of scientists and engineers either as a 

major objective or as part of a broader employment 

survey. A leading example of this type of survey is the 

biennial survey of employment of scientists and engineers in the Federal Government.23

The various surveys differ with respect to definitions 

of scientists and engineers, and in the level of occupational, industrial and functional detail. Because of 

differences in method of collection, certain critical 

concepts, and survey dates, there are substantial difficulties in linking these sources together in a comprehensive picture of employment of scientists and 

engineers.

Since in most instances the scope and method' of 

data collection are explained in the original reports 

on the results of the various surveys, elaborate description and explanation of their method are unnecessary. 

Table 1 summarizes those substantive features of most 

interest to this study, including whether or not Federal support of employment is explicit, the presence 

or absence of occupational detail or, alternatively, the 

field of science, whether or not the character of work 

is indicated, and whether or not supporting detail on 

expenditure and costs is included. In all cases the most 

recent survey available was the basis for categorization.

The various sources of data shown in the table, both 

those that provide information on employment and 

those which provide expenditure or cost data, hardly 

constitute an entity. Most of them have been designed 

to meet various special needs without regard for uniformity in the scope and nature of the data. Moreover, 

within any given survey, cross tabulation of one 

dimension on another is not always possible, for example, in the BLS Survey of Scientific and Technical

Table 1. Sources of information on the employment of 

scientists and engineers in the United States, by selected 

characteristics

Source and sector

Occupational

detail

Federal

support

Character

of work

Expenditure

or cost data

TOTAL ECONOMY

Census of the United States

National register of scientific

and technical personnel..

X

X X X

National engineers register. X X X

Doctorate records file ........... X X X

PRIVATE INDUSTRY

Survey of scientific and technical personnel in industry X X X

Survey of industrial research

and development................ X X X

Economic information

system1.................................

Survey of employment in

atomic energy...................... X

X

X X

Shipments of defenseoriented industries

(M A -175)...............................

HIGHER EDUCATION AND

NONPROFIT

ORGANIZATIONS

Survey of scientific activities of institutions of

higher education................ X

X

X X

Survey of scientific activities of non-profit institutions........................................ X X X

GOVERNMENT

Survey of State research

and development activities

Survey of scientific and technical personnel in the Federal Government................

Occupations of Federal

white-collar w orkers.........

X

X

<2)

( J)

X X

1 Conducted by the U .S. Department of Defense and NASA; unpublished.

2 Civilians only.

Personnel, data on character of work are collected 

only for all scientists and engineers rather than for 

each of the occupational specialties. Different methods 

of data collection, even in the coverage of virtually 

similar populations, also add to the incompatibility of 

the systems. Nevertheless, BLS has put together a time 

series for the period, 1950—66, of science and engineering employment covering engineering and the 

principal natural and physical science occupations,

21 Committee on Academic Science and Engineering, Federal Council for Science and Technology. The reports are

sponsored by the Office of Science and Technology, and prepared by the National Science Foundation.

22 Of the 14 referred to and listed in the table below, only

the U.S. Department of Defense and NASA Economic Information System is not available in published form. A number

of other scientific and technical manpower surveys are published; for example, the surveys on medical manpower conducted by the National Institutes of Health, but do not

receive as wide a distribution and attention as they deserve.

In 1964, it was reported that at least 29 Federal agencies

collect information on scientific and technical manpower, of

which 10 are “major collectors.” Gamble, op. ct., p. 103.

23 The most recent published report in this series is “Scientific and Technical Personnel in the Federal Government,

1966,” Reviews of Data on Science Resources (NSF 68—16,

No. 14, April 1968).

9

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
and representing all economic sectors.24 In evaluating 

the capability of the science-engineering manpower 

information system for estimates of federally supported 

employment, extensive use has been made of this 

source both as control and, in some instances, as a 

basis for estimate.

Approaches to measurement of Federal

employment support

In the next three chapters, the information sources 

described above will be tested for their capability in 

measuring the extent and nature of federally supported employment of scientists and engineers. Two

empirical approaches will be used in this test. One has 

been designated as the budget approach because it 

utilizes budget data on Federal expenditures as a 

basis of estimate, in conjunction with published or 

derived measures of expenditure per scientist or 

engineer man-year. The other approach has been designated the interindustry transactions approach. This 

approach uses input-output analysis and occupational 

patterns by industry as the principal tools of estimation. Both approaches, however, are similar in that 

they relate employment and expenditure.

24 E m p lo y m e n t o f Scientists and E n g in eers in th e U n ited

S ta tes, 1 9 5 0 - 6 6 (Washington, D.C., National Science Foundation, 1968).

10

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Chapter III. Extramural Employment of Scientists and Engineers in 

Federal Programs: Budget Approach

In this and the next chapter efforts to develop 

measures of extramural employment of scientists and 

engineers in Federal programs are described. This 

chapter describes the budget or unit-cost approach. 

Chapter IV uses an interindustry transaction or inputoutput table approach. Both approaches are expedients 

for estimating the Federal effect from sources of data 

not specifically intended for that purpose. They substitute assumption and analysis for direct measurement 

for the most part without a means of validating results. 

A model manpower information system would obtain 

data on the numbers employed, their occupations and 

functions, their distribution among program categories, 

and the associated costs, expenditures and other common measures of program output, directly from extramural suppliers of goods and services to Government 

programs.

The budget approach simulates a model information system by estimating employment values from 

assumptions about expenditures per scientist and 

engineer employed in Federal programs. Expenditure 

in such programs is assumed to be proportionate, if 

not equivalent, to program output. Assumed expenditure or, in some instances, reported costs per scientist 

or engineer are divided into program expenditure to 

obtain estimates of federally supported employment. 

All of the estimates discussed in this chapter were 

produced in this way. The hope was early in the study, 

however, to locate on-going information systems in 

various Federal agencies, which would have provided 

direct estimates of federally supported extramural employment. Recent developments toward such systems 

are discussed in appendix A.

Estimating extramural employment

in Federal programs

Elements of the budget approach. Estimation of 

federally supported employment of scientists and engineers by the budget approach requires data on (1) 

total expenditure and (2) expenditure or unit costs 

per scientist or engineer. Each of these quantities 

further should be divisible into categories representing 

the activity or purposes of expenditure, the character 

of the work performed, the occupational specialties 

involved, and the various extramural performers or

sectors. Expenditure data, of course, must also identify 

the sources of support and the appropriate Federal 

budget classification. The general argument and the 

assumptions underlying the employment estimates are 

discussed in the following section. Subsequent sections 

present and discuss the detailed estimates. All of the 

estimates are in terms of 1966 data.

Estimates of expenditure. The first step in estimating federally supported employment of scientists and 

engineers was to divide total expenditure into two 

broad classes representing a Federal and a non-Federal 

sector. In the Federal sector, however, only expenditures in controllable program categories were included. 

These expenditures— Federal purchases of goods and 

services, grants in aid, and subsidies— correspond to 

Federal Government ouput in the national income 

and product accounts, and are designated here as 

Federal program expenditure. Because they mainly 

involve transfer payments to individuals, such as payments from the retirement and disability trust fund 

accounts or interest paid on Federal debt instruments, 

the remaining expenditures were included as part of 

expenditure in the non-Federal sector. Utilization of 

scientists and engineers as the result of such expenditures, in other words, was assumed in general to be 

the same as employment generated directly by other 

non-Federal expenditures. The aggregate data used 

are on a calendar year basis25 to make subsequent 

estimates of employment congruent with control totals 

of scientist and engineer employment.

Both the totals of Federal program expenditure and 

of other expenditure were next divided into two categories representing the character of work. Federal

25 Calendar year data on Federal expenditures are from

Economic Report of the President (February 1968, table

B -62), p. 283.

26 The best source of information on Federal R&D spending is the National Science Foundation, F e d era l F u n d s for

R esea rc h , D e v e lo p m e n t and O th e r Scien tific A c tiv itie s, an

annual series now in its 17th year of publication.

27 R&D spending funded by other sources initially was

obtained from the National Science Foundation, N a tion a l

P a ttern s o f R & D R e so u rce s (NSF 67-7, Washington, D.C.,

1967), table B-16, p. 23. Later, other sources for particular

sectors proved more useful in estimating employment, because

of the greater detail available.

11

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
spending on research and development26 subtracted 

from Federal program expenditure provided estimates 

of Federal non-R&D spending. Similarly, R&D spending funded by other sources— industry and business, 

universities and colleges, and other nonprofit institutions— was subtracted from the total of other expenditure, as defined above, to estimate other non-R&D 

spending.27

In summary, as the result of the foregoing operations, estimates of four classes of expenditure were 

obtained: (1) Federal non-R&D spending; (2) other 

non-R&D spending; (3) Federal R&D spending; and

(4) other R&D spending. The two Federal components include expenditure on scientists and engineers directly employed by the Government as well 

as those employed in the so-called extramural sectors 

in Federal programs. As the following section indicates, 

the difficulty this fact created for estimating federally 

supported non-R&D employment in the extramural 

sectors was solved by assuming a uniform utilization 

ratio and estimating employment as a residual.

Expenditures per man-year and estimates of employment. Estimation of extramural federally supported employment depends on the availability of 

scientists and engineer man-year expenditures appropriate to the particular dimension of the desired 

employment estimate. No such man-year expenditures 

were available for scientists and engineers working 

in non-R&D functions. Consequently, the unit expenditure used to estimate federally supported non-R&D 

employment was derived by dividing total non-R&D 

expenditure— federally supported and supported from 

other funds— by an estimate of the total non-R&D 

scientists and engineers.28 Estimated employment in 

non-R&D work was then based on a crude assumption 

that the underlying expenditure ratios would be identical in both Federal programs and in activities supported by other funds.

28 Total non-R&D scientists and engineers was estimated

as a residual, subtracting R&D scientists and engineers from

total scientists and engineers, as given in National Science

Foundation, E m p lo y m e n t o f Scien tists a nd E n g in eers in the

U n ite d S ta tes, 1 9 5 0 - 6 6 , (NSF 68-30, Washington, D.C.,

1968), tables A -l, A -2, pp. 20-23. This source also provided

the basic control totals for all sectors as well as the division

of employment by character of work.

29 However, estimates based on other sources were made of

total federally supported employment by particular field of

science. (See chapter 1, table 6.) The inclusion of expenditure in fields of science and engineering other than those

considered in this study should not be troublesome. Such

expenditure can be regarded as the cost of a complementary

input, just as compensation of employees other than scientists

and engineers, supplies, etc. are implicitly treated in our unit

cost estimates. Adjustment of expenditures by field of science

becomes important only when employment in that dimension

is under attention.

30 Such a distribution is attempted in chapter V.

Estimates of federally supported non-R&D employment were obtained by applying the resulting unit 

expenditure in non-R&D employment to the estimates 

of both total and agency Federal non-R&D program 

expenditure. Division of the latter by the former 

produced estimates for each of the Federal agencies 

of federally supported non-R&D employment. Since, 

however, these estimates included employment in the 

Federal Government as well as in other sectors, a 

reduction was necessary to estimate extramural nonR&D employment. Because data on intramural scientist and engineer employment were not available by 

character of work on an agency basis for 1966, the 

agency totals of intramural non-R&D employment 

were also estimated. After deducting the BLS estimate 

of non-R&D scientist and engineer employment in 

the Federal Government for all agencies from the estimate of total non-R&D employment, the remainder— 

extramural non-R&D employment— was distributed 

among the agencies proportionately to the estimated 

distribution of total federally supported non-R&D 

employment.

Estimates of federally supported extramural R&D 

employment by sector or type of performer were made 

by more direct, and somewhat more reassuring, 

methods. For some sectors, expenditures per scientist 

and engineer in some Federal programs specific to the 

sector were available or could be derived with relatively small effort. Extramural Federal expenditure 

on R&D by each agency should have been adjusted at 

this point to eliminate those fields— psychology and 

the social and behavioral sciences— for which there 

are no matching control totals in the NFS-BLS time 

series on employment of scientists and engineers. Unfortunately, the expenditure data shown in Federal

Funds is cross classified by agency and extramural 

performer and by agency and field-of-science only, but 

no cross classification by performer and field exists. 

Consequently, estimation of federally supported R&D 

employment is based on spending in all fields of science and engineering in the various extramural sectors.29 The sources of data used and the adjustments 

made are otherwise best discussed with the estimates 

in the next section.

Estimates of extramural employment

in Federal programs

Estimates of federally supported extramural employment of both R&D and other scientists and engineers, 

by sponsoring agency are shown in table 2. The estimates for both groups were derived by the basic 

method described in the preceding section, but the 

methods used to estimate R&D employment differ 

among the sectors and are further discussed in this 

section. A distribution by program area, by bridging 

agency data in some cases, could also have been

12

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 2. Estimated extramural employment of scientists 

and engineers employed in Federal programs, selected 

agencies, 1966

[In thousands]

Department or

agency

All extramural

scientists and

engineers

R&D

scientists

and

engineers

Other

scientists

and

engineers

All agencies............................... 261.7 221.5 40.2

Agriculture.............................................. 5.2 1.5 3.7

Commerce................................................ 0.9 0.3 0.6

Defense..................................................... 128.3 102.5 25.8

Health, Education and W elfare......... 22.7 18.5 4.2

In terior...................................................... 1.6 1.0 0.6

AEC............................................................ 19.3 18.8 0.5

NASA......................................................... 69.4 69.4 —

N S F............................................................ 5.2 5.0 0.2

O ther.......................................................... 9.1 4.3 4.8

NOTE: Sums of components may not equal total because of rounding error.

attempted at this point.30 Because most Federal programs are dominated, in financial terms at least, by 

single agencies, an agency distribution was felt to give 

results almost as meaningful on a broad level as an 

approximated program distribution of employment.31

Estimates of the employment of R&D scientists and 

engineers in most Federal programs rest on man-year 

expenditure estimates specific to particular sectors. 

The results are shown in tables 3 and 4. For the industrial and business sector, costs per scientist and engineer broken down by source of funds were obtained 

for DOD and NASA and for all other Federal agencies 

combined for 200 leading companies in selected industries.32 Estimates of federally supported R&D employment of scientists and engineers in industry were 

accordingly built up by applying the appropriate man31 In fiscal year 1969, although as many as 14 different

departments and agencies contributed to activities in the fields

of commerce and transportation, and 12 were involved in

health, labor and welfare programs, less than a third of the

agencies were found in three of the functional areas or more.

Eight of the agencies were identified with only one broad

functional area, and three others included only two such areas

in their programs.

32 National Science Foundation, Research and Development in Industry, 1966 (NSF 68—20) 1968, table 46, p. 60.

33 A two-step process was used to derive estimates of Federal R&D expenditures by industry. Percent distributions of

such expenditure for the Department of Defense. NASA and

all other agencies were first calculated from NSF, Research

and Development in Industry, table 45, p. 59. These distributions were then applied to industrial-performer R&D expenditures for each agency, as shown in National Science

Foundation, Federal Funds for Research, Development and

Other Scientific Activities (Vol. X V I, 1967) table C-7, pp.

112-113.

34 The following National Science Foundation reports were

used: Scientific Activities in Colleges and Universities, 1964

(NSF 67—17, May 1968) and R&D Activities in State Government Agencies, (NSF 67-16, September 1967).

35 Op. cit.

36 This procedure was possible because the sources of R&D

funds in each performer category were available in the volumes cited in footnote 34.

37 National Science Foundation, Scientific Activities of

Nonprofit Institutions (NSF 67-17), p. 5, 1964.

year expenditure estimates to agency R&D expenditures on industrial performers. Only the estimates for 

all industries are shown in tables 3 and 4, however.33

The employment estimates for other extramural 

performers, because of lack of detailed man-year 

expenditure data, in each case rest on a cruder basis. 

Considerable adjustment of data were required to 

derive expenditure per man-year and estimate employment. In each nonindustrial performer sector, reported 

expenditures from all sources on research and development and full-time equivalent employment of R&D 

scientists and engineers for the most recent year 34 were 

first adjusted to conform to the BLS-NSF concepts, by 

excluding expenditures and employment in the fields 

of pyschology, the social sciences, and unclassified 

areas. Further adjustments, in the case of the colleges and universities, independent nonprofit organizations, and their affiliated Federally Funded Research 

and Development Centers, were made to convert total 

employment into full-time equivalent units. These 

adjusted totals of money and manpower were then 

extrapolated, usually by assumption, to take account 

of changes between the date of observation and 1966. 

An adjusted ratio of employment to expenditure was 

then calculated for each of these sectors.

Expenditures per scientist and engineer obtained 

after these adjustments were subsequently applied to 

the respective extramural R&D performer expenditures 

for each agency, as reported in Federal Funds.35 The 

estimated employment obtained by applying a common sectoral cost-ratio to each agency’s expenditure, 

however, gave unreasonable results for some performers. Except for independent nonprofit organizations, the alternative procedure adopted for the other 

nonindustrial R&D performers was, first, to estimate 

the overall proportion of R&D employment in the performer category attributable to Federal funds.36 This 

proportion was applied to the BLS-NSF estimate of 

total R&D scientists and engineers in the sector in 

1966. The estimated total R&D employment for the 

sector was then distributed among the respective agencies shown in table 3, in accordance with each agency’s 

relative share of R&D expenditure in the performer 

category.

A common expenditure per man-year for all agencies was used to estimate Federal employment of R&D 

scientists in independent nonprofit organizations. 

More than 90 percent of expenditure and manpower 

in these organizations is devoted to research and development and its administration.37 About 75 percent of 

the work of these agencies is federally financed, 80 

percent of the funds came from two agencies— the Department of Defense and the Department of Health, 

Education, and Welfare. It was consequently believed 

appropriate to apply a uniform average expenditure 

per scientist and engineer for each agency, after adjustment for increases in both expenditure and employ13

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
ment since 1964, to Federal R&D funds in 1966.

Because data on expenditure and employment in 

federally funded Research and Development Centers 

were available for colleges and universities and independent nonprofit organizations, employment in 

these wholly supported components needed to be 

adjusted mainly for fields of science and time. The 

results have been combined in each case with those 

for their administratively affiliated category, however. 

Because Federal Funds does not identify support of 

R&D in State and local governments, an arbitrary 

allocation of 50 percent of expenditure in the “ Other 

performer” category was made to that sector.

Table 5 is derived from the results obtained with 

regard to federally attributable employment of R&D 

scientists and engineers. The implicit expenditure 

ratios, of course, are the quotient of expenditure 

divided by employment in each agency performer 

category. As between performer groups, these implicit 

ratios appear reasonable; for example, since much of 

industrial employment of scientists and engineers is in 

development or applied research,38 plausibly expenditures per scientist or engineer in that sector may be 

above average. In colleges and universities, on the 

other hand, proportionately more effort is devoted to 

basic research, which typically requires less plant and 

equipment, supporting personnel, and so forth. In general, the numbers of R&D scientists and engineers 

employed in an agency performer category depend on 

the character of the work and the fields of science 

represented. However, except in a fragmentary way 

data are not readily available on the latter basis.

Although the relative magnitudes shown in the preceding tables are probably correct for the various 

agency and performer categories, the estimated numbers, in general, may understate the Federal involvement. The estimates for the NASA are reasonably 

close to and consistent with the agency’s own data.39 

On the other hand, our estimate of industrial scientists 

and engineers employed in Department of Defense

Table 3. Estim ated extram ural em ploym ent of R&D 

engineer-scientists on Federal programs by selected agency and performer, 1966

Department or

agency

All R&D

extramural Industry1

Colleges

and

universitie s 1

Independent

nonprofit1

State

government

All agencies 221.450 161,630 47,400 10,720 1,700

Agriculture........................... 1,540 50 1,475 <*> <’ )

Commerce............................ 285 170 100 <*> < 2)

Defense................................. 102,470 87,400 10,190 4,880 <2)

HEW........................................ 18,470 730 13,000 3,540 1,200

Interior.................................. 955 250 490 ( 2) 180

AEC........................................ 18,840 6,500 11,475 865 —

NASA..................................... 69,460 63,600 5,350 420 90

N SF......................................... 5,030 <2) 4,750 270 —

O ther...................................... 4,400 2,900 570 700 230

1 Includes federally funded research and development centers.

2 Less than 50; included in total.

Table 4. Percent distribution, extramural R&D employment of scientists and engineers on Federal programs, by 

selected agencies and performer, 1966

Performer

Department or

agency

All

extramural Industry1

Colleges1

and

universities

Indepen.

nonprofits 1

State and

local

governm ent1

All agencies 100.0 100.0 100.0 100.0 100.0

Agriculture........................... 0.7 <2) 3.1 <2)

<2)

( 2)

Commerce............................ ( 2) ( 2) <2) <2)

Defense.................................

Health, Education and

46.3 54.1 21.5 45.5 ( 2>

W elfare............................. 8.3 0.5 27.4 33.0 70.6

In terior.................................. ( 2) 1.5 1.0 ( 2) 10.6

AEC........................................ 8.5 4.0 24.2 8.1 —

NASA..................................... 31.4 39.3 12.9 3.9 5.3

N S F........................................ 2.3 ( 2) 10.0 2.5 —

O ther...................................... 2.0 1.8 1.2 6.5 13.5

1 Includes federally funded research and development centers. 1 Less than 0 .5 percent.

NOTE: Detail may not add to 100 because of rounding.

programs, approximately 128,000, falls a bit short of 

the 130,000 reported for December 1965 by a highly 

specialized group of defense contractors, which includes only a portion of subcontract employment and 

no direct employment.40 Since the definitions of scientists and engineers are the same for the BLS-NSF time 

series data used as control and the DOD-NASA Economic Information System,41 if the former provides 

an accurate estimate of total scientists and engineers 

either of two possibilities may explain the discrepancy. 

Our man-year expenditure estimate in the defense 

space field may be too high, or there has been over 

reporting of federally supported employment in the 

EIS surveys. Neither possibility could be investigated 

in the course of this study, however.

The obviously missing dimension in these cost-based 

estimates of federally supported extramural employment is occupational specialty. For evaluation of Federal influence in the context of demand and supply of

38 In 1966, 96 percent of industrial R&D expenditure was

allocated to applied research and development. National

Science Foundation, Research and Development in Industry,

1966 (NSF 68-20), table 68, p. 82.

39 If allowance is made for the absence of employment data

for the Jet Propulsion Laboratoiies, NASA reported a total

of 66,800 extramural scientists and engineers for June 30,

1967. Our own estimate for a date approximately 18 months

earlier is 69,400; NASA’s budget at that time was higher

than in June 1967.

40 Calculated from unpublished data supplied by the U.S.

Department of Defense, P la n tw id e E c o n o m ic R e p o r t (Economic Information System). The overall proportion of scientists and engineers employed on Federal work in the reporting

establishments has been close to 90 percent in recent years.

41 The reporting instructions for EIS specify that the definition of scientists and engineers is consistent with the

National Science Foundation definition, also used in the timeseries prepared by BLS. EIS, however, does not exclude

psychologists, but this alone would hardly account for the

difference.

14

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
scientists and engineers, detail on either the occupations or on the related fields of science and engineering 

involved is essential. Except for the State and local 

government sector, however, the difficulty is not an 

absence of sufficient occupational employment detail. 

What is lacking is a division of expenditure, both total 

and Federal, along comparable lines. Until expenditure or man-year outlays can be matched to occupational or field of science groups, the budget approach 

permits no more than estimates of aggregate scientist 

and engineer employment.

This overview of extramural employment of scientists and engineers should end with a few substantive 

comments on the pattern of Federal utilization. Keeping in mind the crudity of the techniques of estimation 

and resulting errors of estimation, it is nevertheless 

clear that in 1966 Federal spending contributed to a 

very sizable share of employment in the non-Federal 

economic sectors. Table 6 shows that an estimated 20 

percent of all scientists and engineers in the nonFederal sectors owed their employment to Federal 

program expenditure. Although private industry as a 

whole used only about a third of its scientists and engineers on research and development, the estimates in 

this study indicate that almost 85 percent of private 

employment supported by Federal programs was devoted to R&D. In particular sectors, especially the 

colleges and universities and the independent nonprofit oi'ganizations. Federal spending may affect more 

than 70 percent of the scientists and engineers engaged 

in research and development. Only about 5 percent of 

non-R&D employment of scientific and engineering 

manpower, on the other hand, is directly affected by 

Federal dollars.

Agency (or program) patterns of extramural utilization of scientists and engineers also show significant 

variation. Although less than 15 percent of such employment is in functions other than R&D, in the older 

established departments and agencies— the DepartTable 5. Implicit performer cost-ratios, extramural R&D 

scientists and engineers in Federal programs, selected 

agencies, 1966

Department or

agency

Performer

All

extra

mural

performers Industry1

Colleges1

and

Universities

Independent

nonprofit 1

State and

localgovern

m ent3

All agencies $53,770 $57,175 $41,500 $53,395 $22,700

Agriculture........................... 45,975 52,000 41,800 ( 2) <*>

Commerce............................ 46,300 50,000 38,000 ( 2) ( 2)

DOD........................................ 50,050 50,650 41,365 52,830 ( 2)

HEW..................................... 45,100 50,000 41,350 52,850 20,800

In terio r.................................. 51,600 58,400 40,200 ( 2) 46,670

AEC........................................ 63,300 102,630 41,290 52,830 —

NASA..................................... 60,150 61,760 41,270 52,860 34,450

N S F........................................ 42,550 ( 2) 41,100 53,300 —

O ther...................................... 51,900 54,170 57,720 55,700 9,130

1 Includes federally funded research and development centers.

2 Estimated number of scientists and engineers too small to compute cost

ratio.

3 Federal R&D funds for State governments in FY 1966 estimated at 50 percent of the "o th er” performer category.

Table 6. Total and federally supported extramural employment of scientists and engineers, selected performers, 

1966

Character of work

and performer

Total

extram ural

Federally

supported

Percent

Federal

All activities (in thousands)............................ 1279.2 261.7 20

Research and developm ent.......................................... 454.5 221.5 49

Industry1........................................................................ 370.9 161.6 44

Colleges and universities1........................................ 65.6 47.4 72

Independent nonprofit organizations1.................. 213.6 10.7 79

State and local governments................................... 4.4 1.8 41

Non-R&D............................................................................. 824.7 40.2 5

’ Includes federally funded research and development centers.

2 Estimated from Scientific Activities of Nonprofit institutions (NSF 6 7 -1 7 ,

March 1969).

SOURCES: See text and appendix C.

ments of Agriculture and Commerce, for example— 

the reverse is the case. (See table 20.) As will be shown 

in chapter V, such agencies also tend to have a relatively high proportion of their total R&D activity in 

intramural employment. Agency influence on the R&D 

performance sectors also varies. The Department of 

Defense affects more than half of R&D employment 

on Federal programs in industry, but influences only 

one-fifth of R&D scientists-engincers employment in 

colleges and universities, where the Department of 

Health, Education, and Welfare and the Atomic 

Energy Commission are more prominent sources of 

activity. (See table 4.)

An effort to distribute Federal agency employment 

in R&D by industry produced rather indifferent 

results,42 sufficient only to indicate some broad relationships. Industrial employment of R&D scientists 

and engineers is highly concentrated in the programs 

of the Defense Department, which result in half or 

more of federally supported R&D employment in all 

but one industry covered in the Census-NSF survey.43 

Other agencies have correspondingly smaller effect on 

federally supported R&D employment. Federal effect 

on total R&D employment, on the other hand, is much 

more varied among the industries, partly because of 

the dependence of the industry on Federal expenditure.

Evaluation of the budget approach

As demonstrated in this chapter, the budget or manyear expenditure approach does permit estimation of 

federally supported employment of scientists and 

engineers. Sufficient information exists to construct

42 The principal factor inhibiting this exercise is the conceptual difference in reporting employment by industry.

Bureau of Census industry groups, in their reports on R&D

manpower and expenditure, are based on the c o m p a n y as the

reporting unit, while the Bureau of Labor Statistics surveys

of science and engineering manpower are on an establish m ent

basis.

43 Chemicals, machinery, electrical equipment, motor

vehicles, aircraft missiles, instruments, and all other. See

R esea rch and D e v e lo p m e n t in In d u str y (NSF 68-20, 1966),

table 46, p. 60.

15

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
plausible, if not wholly accurate, estimates of such employment. The various dimensions for which estimation 

is possible, moreover, reveal a substantial amount of 

information about the structure of the Federal employment effect in all major extramural sectors.44 In only 

two, but very important, dimensions— occupation and/ 

or field of science and function— are the sources 

incomplete or seriously deficient in the ingredients 

needed to estimate employment.

The principal weakness in the budget approach was 

found to be on the side of financial and expenditure 

data. Rather strong assumptions had to be made in 

allocating aggregate expenditures among Federal programs and agencies, particularly in areas other than 

research and development. Only two extramural 

sectors provided any detailed estimates of expenditure 

per scientist and engineer and thereby necessitated 

crude assumptions to derive employment estimates for 

other sectors. Employment data, on the other hand, 

appear to be adequate for most sectors. Indeed, much 

more detailed estimates encompassing at least R&D 

employment by occupation or field of science would 

have been possible if such data could have been 

bridged to financial and cost data, appropriately differentiated by funding sources. Efforts to integrate 

employment and financial data in the fields of science 

and engineering should therefore be given careful 

consideration.

No approach to a problem of estimation such as is 

attempted in this study can exceed the limitations 

of the sources of data. Apart from the question of 

modification and improvement in the data sources, 

however, the merits and limitations of the budget 

approach as such should be recognized. Its principal 

merits are, first, that currently it provides the only 

comprehensive means of estimating Federal employment influence in science and engineering, and, second, 

that the kinds of data required are already being 

collected, although not in ztll sectors. The principal 

limitation is that the approach is relatively inflexible 

as a tool of manpower planning in Federal programs. 

It can provide information on the manpower implications of current changes in support levels within a 

given program structure. It could also be used to 

project changes in program requirements, but only if 

there is a suitable means of projecting both expenditure and man-year outlays.45 On the other hand, to 

visualize the utility of the approach for estimating the 

requirements for scientists and engineers in so-called 

“ new initiative” programs is difficult. The levels of 

detail on total and man-year expenditures required 

for such programs, in particular, may make it worthwhile to consider a more direct attack.46

44 Previous efforts to utilize man-year expenditures as estimators of employment have covered fewer sectors and provide

no functional and agency detail. For an example of such an

earlier effort, see Melville S. Green, Studies in Scientific and

Engineering Manpower (U.S. Department of Commerce,

Office of Assistant Secretary for Science and Technology,

Staff Report 63-1, October 1963).

45 A pioneering effort to project Federal program expenditure is the work of Gerhard Colm and Peter Wagner, Federal

Budget Projections (Washington, D.C., Brookings Institution,

1966). The conceptual and measurement problems involved

in developing £fh index of R&D costs are discussed in Helen

S. Milton, Cost of Research Index (Research Analysis Corp.,

McLean, Va., March 1966) ; also see Kathryn S. Arnow,

“Indicators of Price and Cost Change in R&D Inputs,” and

Allan D. Searle, “Measuring Price Change in R&D Purchases,” in Proceedings (American Statistical Association,

Business Economics Section, 1966).

46 This is not to say that a very rough first cut could not be

taken by assuming certain levels of expenditure and unit costs

of scientist and engineer employment. See the illustration provided in chapter V I, pp. 29-39.

16

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Chapter IV. Extramural Employment of Scientists and Engineers in Federal Programs:

Interindustry Transactions Approach

The results described in the previous chapter provide 

only a broad picture of the effects of Federal spending 

on the deployment of scientific and engineering manpower. They confirm more casually constructed or 

indirect evidence of the concentration of the Government’s demand for scientists and engineers in research 

and development and among certain extramural R&D 

performers. On the other hand, they provide only a 

limited view of the industrial structure of program 

manpower requirements, even in the R&D area, and 

virtually no occupational detail. Both of these latter 

dimensions are essential to purposes such as planning 

for major changes in program support levels or for the 

introduction and development of substantial new 

programs.

The relatively new tool of input-output analysis 

offers a method of overcoming some of the limitations 

of the budget approach. Input-output analysis consists 

of manipulating a tabular model of the economy, 

which displays the transactions among all producing 

industries and between them and the final demand 

sectors, including government. The technique has been 

used for studies of a variety of economic relationships, 

including studies of employment and manpower requirements.47 This chapter briefly describes the essential features of the interindustry transactions approach, 

provides an estimate and some analysis of extramural 

employment in scientific, engineering and allied occupations resulting from Federal purchases in 1965, and 

evaluates the approach as a manpower planning tool.

Elements of the interindustry transaction approach

Estimates of the employment of scientists and engineers attributable to Federal expenditure may be 

derived from so-called interindustry employment tables. 

These tables show the total employment generated by 

the delivery of a billion dollars of an industry’s output to 

final demand or to other industries. Total employment 

is the sum of employment in the industry providing the 

goods or services and the employment in all supporting 

industries. The total of a particular industry’s employment, therefore, is the sum of employment generated 

by its gross output, that is, the industry’s delivery to 

final demand and to all other industries resulting from 

a billion dollars of sales. Application of appropriate

occupational patterns or coefficients to this employment total provides estimates of occupational employment in the industry per billion dollars. If the total 

purchases of the Federal Government, or any of its 

component programs, and their industrial distribution 

are known, then the corresponding occupational employment in each industry and in all industries may 

be estimated.

Acceptance of the results achieved through application of the interindustry transactions approach 

depends on the acceptability of certain assumptions 

and limitations about the process and the data. In this 

section, these assumptions and limitations are set forth. 

Succeeding sections (1) present the resulting occupational distributions and derived total requirements for 

scientific and engineering manpower in certain Federal 

programs, and (2) evaluate the usefulness of the 

approach in terms of the objectives of a scientific and 

technical manpower information system.

The interindustry employment tables. Extramural 

employment of scientific and technical manpower on

47 A number of employment studies based on input-output

analysis have appeared in the Monthly Labor Review. See

Jack Alterman, “ Inter-industry Employment Requirements,”

(July 1965), pp. 841-850; Richard P. Oliver, “The Employment Effect of Defense Expenditures,” (September 1967),

pp. 9-16 ; Max A. Rutzick, “Worker Skills in Current Defense

Employment,” (September 1967), pp. 17-21. Projections of

employment either in terms of the numbers expected as the

result of economic growth or in terms of hypothetical social

and economic goals, analogous to federally supported programs, are other uses of input-output analysis. See Projections

1970: Interindustry Relationships, Potential Demand, Employment (BLS Bulletin 1536, 1966) ; and Leonard A. Lecht,

Manpower Requirement for National Objectives in the

1970’s (Center for Priority Analysis, National Planning

Association, Washington, D.C., February 1968).

48 Input-output tables are essentially a matrix or grid relating all transactions in the country, including industry sales to

other industries and sales, to a final demand sector such as

business, households, and so on. Each transaction between

industries, which make up the processing sector of the table,

is counted twice to reflect the fact that it represents an input

as well as an output of an industry. A good introduction to

the subject is William H. Miernyk, The Elements of InputOutput Analysis (New York, Random House, 1965). A more

extensive and more mathematical treatment may be found in

Hollis B. Chenery and Paul G. Clark, Interindustry Economics

(New York, Wiley, 1959)

17

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Federal work may be estimated from interindustry 

employment tables for the Federal sector of final 

demand. Such tables are generated from the basic 

input-output table 48 and show for each billion dollars 

of Federal purchases the equivalent employment in the 

supplier industries and their supporting industries.49 

The product of the industry employment coefficients 

and expenditure on the output of an industry equals 

the estimated total employment in the industry associated with the expenditure.

The employment estimates used reflect the industrial 

distribution of total private employment in 1965 and 

were prepared by the Interagency Growth Project. 

The input-output tables used to generate these estimates of employment are based on the 1958 table; 

the technical or product coefficients were adjusted to 

1965 and reflect subsequent changes in the technologies of production, changes in the product mi:-:, and 

changes in factor prices. Such adjustments are necessarily rough, because they have been based on fragmentary information on industrial and technological 

developments rather than intensive industry studies 

required for greater precision of estimate.50

T h e F e d e r a l B il l-o f -G o o d s . Given industry employment coefficients, the first step in the estimating process 

is to obtain industrial distributions of Federal purchases 

of goods and services. Such distributions conventionally 

referred to as the Federal “ bill-of-goods,” consist of

49 l.e., the industries supplying raw materials, power, services, etc., for current production. Input-output tables usually

do not include purchases of capital goods as an input coefficient. See Projections 1970, etc., p. 20; however, much

research has been undertaken to solve the problem of empirical estimation of capital coefficients. See Chenery and Clark,

op. cit., pp. 149-153.

50 For further discussions of the nature of such adjustments,

see Chenery and Clark, pp. 85-100. A completely revised

table of interindustry relations for 1963 was published after

this study had been completed.

51Budget of the United States, Special Analysis, Fiscal

Year 1970, table 0-3, p. 209. Probably only about one-third

of State-local aid consisted of transfer payments under public

assistance and medicaid programs.

52 The exclusion of these Federal payments is necessary to

maintain consistency between the input-output tables and the

national income and product accounts.

53 Projections 1970, table IV-4, pp. 63-64.

54 Data on State and local government expenditures are

from Joint Economic Committee, Subcommittee on Economic

Progress, State and Local Public Facility Needs and Financing, December 1966, p. 37.

55 Conversations with officers of the General Accounting

Office, which warrants the payment of the Government’s bills,

revealed that there is no coding system which identifies expenditures with programs and the supplier industries as classified

by the Standard Industrial Classification scheme. It had been

hoped that this would be a primary source relating purchases

to program activity.

56 Budget of the United States, Special Analysis, Fiscal

Year 1970, table A-6, p. 18.

payments for Federal purchases of goods and services 

in the private industrial sector. Except for purchases 

from private educational and nonprofit organizations, 

this sector corresponds to the industrial and business 

sector of the private economy. Expenditures on personal services hired directly from the household sector 

and expenditures in the government sector itself, including government enterprises, are not included in 

the Federal bill-of-goods.

In addition to purchases of goods and services, Federal aid to State and local governments constitutes a 

significant and growing proportion of government outlays. In 1965, Federal outlays to such governments 

were nearly 10 percent of total Federal outlays and 

about 19 percent of Federal outlays on domestic 

programs.51 As presently constituted, Federal grants, 

loans, and transfer payments to State and local governments are not included in the Federal bill-of-goods, 

however.52 On the other hand, there is a bill-of-goods 

for State and local governments,53 which includes the 

expenditure of Federal funds in the industrial aggregates. To estimate the corresponding federally supported employment, a crude bill-of-goods representing 

the expenditure of Federal funds was constructed from 

unpublished data adjusted to a calendar 1965 basis. 

Transfer payments to individuals, under federally supported public assistance and some manpower and 

poverty programs, and shared revenues were excluded. 

The amount constituting the bill-of-goods— about $6.8 

billion— represents about 9 percent of 1965 State and 

local government spending,54 more than two-thirds of 

which was allocated to the construction of highways 

and other facilities.

In principle, the total purchases of the Federal Government can be subdivided into any convenient set of 

industrial distributions representing various functions 

or programs. In practice, however, such distributions 

are not easily accessible, but must be painstakingly constructed from various sources of information, including 

special studies.55 Consequently, the only ready-at-hand 

bills-of-goods available divide Federal purchases between defense and nondefense purchases.

Defense purchases, of course, have dominated Federal purchases of goods and services during the past 

decade; in fiscal year 1965, the year of estimate of 

scientists and engineers on Federal work, the defense 

effort absorbed 75 percent of such purchases.56 The 

defense bill-of-goods used here includes only those 

purchases made by the Department of Defense. Some 

additional defense purchases made by agencies such 

as NASA and AEC are included in the category 

“ Other government,” because the total purchases of 

those agencies could not be segregated functionally.

Estimating “ Federal” Employment. Estimation of 

the employment attributable to Federal purchases of 

goods and services in the private sector, thanks to the

18

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
computer, is a comparatively simple mechanical process. Each bill-of-goods is run against an employment 

inverse, that is, a matrix of employment coefficients 

arranged by industry, to produce estimates of total 

employment by industry. These estimates become the 

base for further estimation of occupational employment in each of the sectors considered; in this case: 

Final demand, total Federal expenditure, Department 

of Defense expenditure, and other Government expenditures. Estimates of federally supported employment 

of scientists and engineers in the State and local government sector, however, could be broken down by 

Federal department or agency.

Once such employment estimates have been made, 

it is then comparatively easy to calculate the percentages or ratios of federally supported employment to 

total employment in each industry and occupation. 

The percent distribution of the Federal share between 

defense and nondefense employment in each industry 

as well as the industrial distribution in each program 

sector, as noted above, are then calculable as are similar distributions of occupational employment.

Each employment estimate is composed of two parts 

—direct and indirect employment. For any given industry direct57 employment is the employment created 

by direct delivery to final demand or a sector of final 

use such as the Government. The indirect component 

of total employment represents employment in the 

industry created by Government purchases in all other 

industries. Sales of steel billets to the Governmentowned ordnance plants, for example, create direct 

employment, but Government purchases of shovels 

create indirect employment in the steel industry. A 

breakdown of the two types of employment could be 

useful for manpower planning in Federal programs, 

although no attempt was made for this study.

A p p lic a tio n o f O c c u p a tio n a l P a tter n s. The final 

step short of analysis is to apply occupational patterns 

or coefficients to the estimates of total industry employment. Federally supported and total industry employment used for this purpose are shown in appendix B.

57 Sometimes referred to as primary employment.

58 Occupational Employment Patterns for I960 and 1975

(BLS Bulletin 1599, December 1968).

59 A conversion table developed by the BLS Division of

Occupational Employment Statistics was used in this study.

The SIC groupings used in the industry-occupation matrix

are shown in BLS Bulletin 1599, appendix B, pp. 83-85. The

interindustry classification scheme is in Projections 1970,

table IV-1, p. 58.

60 The patterns in the BLS occupation-industry matrix are,

therefore, the patterns of the average firms in the respective

industries.

61 For example, in fiscal year 1965, 25 percent of procurement by the Department of Defense was through a sole

source. The remaining purchases were made by more competitive procurement methods. U.S. Department of Defense,

Annual Report (Washington, D.C., 1967), p. 415.

The occupational patterns used included 21 distinctive 

occupations: Eight scientific occupations, including 

mathematicians; 10 engineering occupations, and 3 

technician groups. The occupational patterns used, 

and the method of their construction, were adapted 

from the BLS occupation-industry matrix to correspond 

to the industry groups of the input-output tables.58

The resulting estimates of occupational employment 

attributable to Federal purchases of goods and services 

deviate from “ true” estimates, since the correspondence of the two schemes of industrial classification is 

only approximately identical. The selection and classification of the 116 industries in the industry-occupation 

matrix were governed by interest in particular occupations (mainly those requiring extensive education and 

training) and by the availability of related historical 

data sufficient to permit projections of employment. 

Consequently, the occupational patterns for some industries, for example, construction, are based on broad 

industrial categories, while others relate to finer industrial groups. The interindustry tables consolidate 

detailed SIC industries into 86 groups, 77 of which 

were employed in this study. This scheme of grouping 

is governed largely by the composition of final demand 

and its distribution among producing industries. Because of these differences in purpose, the conversion 

of the industry-occupation matrix to the interindustry 

base cannot be complete with respect to the relevant 

occupational patterns, although both schemes exhaust 

total employment.59 Until occupational patterns for a 

greater number of detailed industries are developed 

on a common base, estimates of occupational employment must be regarded as only a first approximation.

An additional source of error in estimating occupational employment may result from the selective character of Federal purchases among firms in supplier 

industries. Because of lack of information about the 

intraindustry distribution of such purchases and corresponding differences in occupational patterns,60 the 

assumption has been made that the patterns for the 

industry as a whole are identical with those of Federal 

suppliers. In fact, of course, Federal Government procurement is not randomly distributed within industries. In defense procurement especially, a particular 

company or establishment commonly is designated as 

“sole source.” 61 Such suppliers may have occupational 

patterns that are unique because of their unique 

product-mix and the applicable technology involved.

Extramural employment of scientists

and technicians

The resulting estimates of extramural employment 

of scientists and engineers supported by Federal funds 

are necessarily incomplete without estimates from other 

sources. As explained earlier, the Federal bill-of-goods 

covers only a portion of employment outside of the

19

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Federal Government. Consequently, the overall results, 

shown below in table 7, include adjusted estimates 

based in part on the man-year expenditure estimates of 

employment developed in chapter III.

Several crude adjustments had to be made to estimate federally supported employment in the uncovered sectors. Ratio estimates were used to estimate 

total employment in publicly controlled universities 

and colleges to reflect the fact that employment in 

private higher education is included in the estimates 

based on the Federal bill-of-goods.62 Federally supported employment in both publicly controlled higher 

education and in State and local government, public 

employment was estimated by applying ratios calculated from the scientists and engineers’ registers to 

control totals in the BLS-NSF time series.63 This 

method of estimate was necessary because the registers, 

despite certain shortcomings, are the only primary 

source of data on total federally supported employment of scientists and engineers in those sectors. The 

estimate for the nonprofit institutions sector, on the 

other hand, is the same as developed in chapter III.

Estimates of federally supported extramural employment in the State and local government sector 

were made on the basis of a crude bill-of-goods supplied by the Bureau of the Budget. The resulting 

estimates of employment represent those portions of 

employment generated in private industry by the purchases of State and local governments and which are 

assumed to be attributable to grants-in-aid from the 

Federal Government. Highway and educational facilities construction absorbed more than 90 percent of 

such funds in calendar year 1965. Despite the substantial amounts involved, the effect on the shares of 

federally supported employment in private industry, 

as shown in table 7, is fractionally small.

The addition of estimated employment of federally 

supported engineers in that sector increases the allsector total of extramural employment by less than 

1 percentage point.

Appendix C shows for the detailed occupations the 

estimated total employment and federally supported 

employment resulting from State and local government purchases from private industry. The estimates 

of occupational employment are questionable, however. 

In view of the substantial role of the Federal Government in State highway construction, for example, the 

number and percent (6 percent) of employment of 

civil engineers are remarkably small. Federally supported mining engineers, on the other hand, are esti62 The ratios used were taken from National Science Foundation, S cien tific A ctiv ities at U niversitiesran d C o lle g es, 1 9 6 4

(NSF 68-22, Washington, D.C., 1968), table II, p. 16.

63 E m p lo y m e n t o f S cien tists a nd E n g in eers in th e U n ited

S ta tes, 1 9 5 0 - 1 9 6 6 (NSF 68-30) table A -l.

64 O cc u p a tio n a l E m p lo y m e n t P attern s (BLS Bulletin 1599)

appendix C., p. 86.

mated at 27 percent of extramural employment in 

State and local government programs. Although these 

estimates could be close to the actual relationship, 

their implausibility strongly points to the general need 

for more detailed program-based bills-of-goods and 

possibly finer industry-occupation patterns.

Several observations of substantive interest may be 

made on the basis of table 7. First, the overall Federal 

share of extramural scientist-engineer employment is 

significantly large. Some comparisons may help to 

evaluate this share. In 1965, the Government’s budget, 

exclusive of transfer payments and net interest, represented about 12 percent of Gross National Product. 

Estimates of the direct and indirect effect of Federal 

spending on total employment in 1965 indicate that 

the Government’s share, again only in private industry 

economy is about 5 percent. In the broad category, 

professional, technical, and kindred workers, the Federal portion still only approaches 6 percent of the 

estimated total. Further, scientists and engineers in all 

sectors of employment, public and private, were only 

about 1.5 percent of total employment in 1960, and 

are projected to increase to a little over 2 percent by 

1975.64 Thus, in 1965 the federally supported share of 

scientist and engineer employment was 11—14 times 

greater, relatively, than the total proportion of such 

employment in the economy.

The Federal effect in particular sectors is even larger 

than its total effect on the employment of scientists and 

engineers. The estimates shown in table 7 indicate very 

large shares of federally-supported scientist-engineer 

employment in the publicly controlled universities and 

colleges, and in the privately controlled nonprofit 

organizations. In these sectors the shares of federally 

supported employment are 2 to 4 times larger than 

the sectoral proportions of total science and engineering employment. On the other hand, State and local 

governments experienced the least effect; even with 

the addition of federally supported employment in 

private industry the Federal share is only 13 percent.

Evaluation of the significance of Federal support, 

however, must look not only at aggregates, but also at 

its influence on the utilization of particular occupational groups. The degree of utilization and, by impliTable 7. Estimated employment of scientists and engineers supported by Federal funds, by type of employer, 

1965

Type of employer Total

Federally

supported

Percent

Federal

All employers....................................................... 1,290,300 249,907 19

Private industry1.............................................................. 1,088,400 169,827 16

Scientists2...................................................................... 224,743 21,965 10

Engineers........................................................................ 863,657 147,862 17

State and local government.......................................... 83,200 12,480 15

Publicly controlled universities and colleges .... 104,700 59,300 57

Nonprofit organizations................................................. 14,000 8,300 9

1 Includes medical, educational services, and nonprofit organizations other

than State and local government units.

2 Includes mathematicians; excludes social scientists.

20

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 8. Federally supported employment in selected 

scientific and technical occupations as a percent of total 

occupational employment, private industry, 1965

[Employment in thousands]

Occupation

Total

private

industry

Total

Federal

Government

Department

of

Defense

Other

Federal

Government

In percent

All occupations............................ 62,326.0 5.2 3.3 1.8

Professional, technical and kindred

w orkers................................................... 6,026.8 7.7 5.1 2.6

Scientists and engineers........................ 1,088.4 15.6 11.0 4.6

Engineers, technical ............................. 863.6 17.1 12.4 4.8

Engineers, aeronautical.......................... 48.3 62.3 51.1 11.2

Engineers, chemical................................. 45.3 10.6 6.4 4.2

Engineers, civil.......................................... 127.6 7.8 4.1 3.4

Engineers, electrical................................ 186.0 20.0 14.7 5.3

Engineers, mechanical........................... 166.4 16.6 11.8 4.8

Engineers, metallurgical........................ 25.1 15.2 10.3 5.0

Natural scientists..................................... 224.7 9.8 5.9 3.8

Chemists..................................................... 92.9 8.7 4.9 3.8

Agricultural scientists............................ 22.0 6.5 1.8 4.7

Biological scientists................................. 23.4 5.5 2.5 2.9

Mathematicians........................................ 25.7 18.0 13.1 4.8

Physicists................................................... 22.4 16.6 11.7 4.9

Technicians, except medical and

dental....................................................... 746.0 11.8 8.1 3.7

Draftsm en................................................... 246.4 12.2 8.6 3.7

cation, the goods and services to which their services 

contribute necessarily underlie any judgment about the 

size of Federal utilization of scientific and technical 

manpower. Table 8, which shows the estimated shares 

of federally supported employment in particular scientific and technical occupations as a percent of total 

occupational employment provides some insights. The 

table shows considerable occupational variation in the 

federally supported shares of occupational employment, 

ranging from under 6 percent (biological scientists) to 

over 60 percent (aeronautical engineers) of employment. Federally supported employment was generally 

higher among engineers than among scientists.

Table 8 also shows how the estimated Federal shares 

of extramural employment were distributed between 

employment in programs of the Department of Defense 

and all other Federal programs. Not too surprising is 

the dominance of the Defense Department in almost 

every occupation. In only a few occupations, notably 

civil engineering and agricultural scientists, a major 

share of the Federal Government’s impact is generated 

by other programs.

For planning purposes, differences in occupational 

patterns among types of programs may be more relevant than the levels of expenditure involved. Unfortunately, the data available allow an analysis only of 

broad differences between Federal programs and other 

patterns of utilization of engineers and scientists. Table 

9 indicates that the two Federal occupational patterns

65 In fiscal year 1965, of the total of $15,731 millions of

Federal obligations for research, development, and R&D

plant, 31 percent was allocated to research and 11 percent

to basic research. The Department of Defense was responsible

for more than half of total Federal development spending.

These percentages were calculated from F ed era l F u n d s, Vol.

X V I, tables C-78, C-81 to C-84, pp. 212-214.

are generally similar to each other and to the private 

economy.

Differences in occupational patterns between the 

Federal Government as a whole and the total economy 

clearly appear to be influenced mainly by defense 

spending. The higher utilization ratios in certain 

engineering specialties—aeronautical and electrical 

engineers—is largely because of the relatively large 

numbers employed in defense programs. In other Federal programs, the engineering pattern more nearly 

approximates the pattern of the total economy. Federal 

utilization of scientists and mathematicians is also similar to the total pattern, both in defense and nondefense programs. Such differences in influence among 

the occupations in part are attributable to the heavy 

Federal support of applied research and development, 

on the one hand, and the relatively smaller allocation 

of Federal R&D funds to basic scientific research.65

The differences in occupational patterns between 

the various sources of expenditure are probably the 

joint result of two factors. One is the occupational 

patterns of employment in the various industries, 

which may differ substantially. The other factor is the 

industrial distribution of procurement in particular 

Federal programs. Since, in the inter-industry transactions approach, the individual industry occupation 

patterns are necessarily assumed to be unchanged from 

program to program, the industrial mix of the program becomes the principal determinant of the overall 

occupational pattern of any given program.

The force of the industrial influence is illustrated in 

tables 10, 11, and 12. Table 10 shows the estimated 

distribution of total employment at large and in the 

defense and nondefense areas of Federal program 

activity. In 1965, the Federal Government procured

Table 9. Percent distribution of scientists and engineers 

in private industry, selected occupations, by source of 

support, 1965

Occupation

A ll

sources

of

support

Total

Federal

Government

Department

of

Defense

O ther

Federal

Government

Scientists and engineers (num ber) . . 1,088,400 169,827 120,134 49,704

Total (in percent)....................... 100.0 100.0 100.0 100.0

Engineers, technical................................ 79.4 87.1 88.9 82.6

Engineers, aeronautical.......................... 4.4 17.7 20.5 10.8

Engineers, chemical................................. 4.2 2.8 2.4 3.8

Engineers, civil.......................................... 11.7 5.7 4.4 8.7

Engineers, electrical................................ 17.1 21.9 22.8 19.7

Engineers, industrial............................... 8.8 10.0 10.4 9.3

Engineers, mechanical........................... 15.3 16.3 16.4 16.0

Engineers, metallurgical........................ 2.3 2.2 2.1 2.5

Engineers, m ining.................................... 1.8 0.6 0.5 0.7

Engineers, sales........................................ 5.3 4.0 4.0 4.0

Other engineers, technical.................... 8.0 5.8 5.4 6.8

Natural scientists..................................... 20.6 12.9 11.1 17.4

Chemists..................................................... 8.5 4.8 3.8 7.1

Agricultural scientists............................ 2.0 0.8 0.3 2.1

Biological scientists................................. 2.1 0.7 0.5 1.4

Geologists and geophysicists................ 1.8 0.8 0.7 0.8

Mathematicians........................................ 2.4 2.7 2.8 2.5

Physicists................................................... 2.1 2.2 2.2 2.2

Other natural scientists......................... 1.6 0.9 0.7 1.3

NOTE: Figures may not add to total because of rounding.

21

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
much more of its goods and services from the manufacturing industries than from other industrial sectors. 

Federal programs outside of the defense area, however, 

were relatively large purchasers of goods and services 

from the nonmanufacturing industries, notably in construction and the service industries. The industrial 

pattern for engineers and scientists, shown in tables 

11 and 12, are generally similar to the pattern of 

Federal effect on total employment. On the other 

hand, there are substantial differences between the two 

occupational groups. Engineers in federally supported 

programs are more heavily concentrated than scientists in the manufacturing industries, and scientists 

have a much more substantial representation in the 

services and other nonmanufacturing industries. Presumably, further breakdown of Federal programs 

would show even more varied industrial and occupational patterns.

Table 10. Industrial distribution of estimated total employment, by expenditure source, 1965

Industry*

All

expenditure

Department

of Defense

Other Federal

Government

A ll industries (n u m b er)....................... 62,326,607 1,918,300 1,154,773

Total (in percent).................................. 100.0 100.0 100.0

Agriculture, forestry and fisheries............... 7.5 1.3 4.8

M ining..................................................................... 2.9 1.5 1.8

Construction.......................................................... 5.6 4.6 15.1

M anufacturing...................................................... 29.4 77.6 51.3

Transportation..................................................... 4.3 ( 2) 7.1

Communications and public u tilities............ 2.4 3.9 5.9

Trade....................................................................... 24.4 3.7 4.5

Finance, insurance and real estate............... 5.4 0.3 1.8

Services and miscellaneous............................. 17.7 7.0 10.1

1 For SIC-related industries, see 6LS Bulletin 1536, table IV-1, p. 58.

2 Less than 0 .0 5 percent.

NOTE: Figures may not add to total because of rounding.

SOURCE: Appendix table A.

Evaluation of the interindustry transactions 

approach

As a method of measuring Federal influence on the 

employment of scientific and technical manpower and 

as a tool for manpower planning, the interindustry 

transactions approach on balance is a promising technique. Conceptually, it consists of a set of simultaneous 

equations representing a set of interrelated production 

functions, in which output is treated uniformly between 

industries and among various bills-of-goods. For program planning in which the focus is on manpower 

requirements, this feature is an analytical advantage. 

Although some limitations exist, the major difficulties 

arc found not in the technique itself, but in the underlying information system. Therefore, separating these 

two aspects is essential in evaluating the approach.

Given the availability of the basic input-output table, 

the interindustry transactions approach potentially has 

several very strong technical advantages: Comprehensiveness, internal consistency, analytic compatibility, 

and adaptability. The first and second advantages are

inherent in the input-output tables. Such tables, by 

definition, must account for all transactions in the 

economy.66 Hence, the resulting employment relationships are comprehensive, irrespective of the varying 

quality of the data in the cells of the employment 

matrix. Both direct and indirect employment are also 

estimated. By the same token the employment coefficients and estimates generated by an input-output 

table are internally consistent, that is, the same method 

of estimating employment is not only applied to each 

of the industries but also resulting employment in the 

rows of the table must equal the column totals. This 

will be the case whether total employment or employment in a particular occupation is under consideration. 

An especially strong feature of the approach is its compatibility with various analytic sources of data, partly 

by design as in the case of the national income 

accounts with which the input-output tables share a 

common source of data as well as conceptual similarity, and partly by linkages to employment and other 

data via the Standard Industrial Classification system. 

Because of this feature, the interindustry approach 

readily lends itself to the analysis of dynamic changes 

in the growth and structure of the economy, including 

projections of employment requirements. Finally, in 

principle the interindustry transactions approach is 

highly adaptable, since both the sources of demand 

and the resources required to satisfy varying sources 

of demand can be disaggregated to a relatively fine 

level of detail. In employment analysis, the resulting 

detail of structure can be especially useful.

As presently designed, the interindustry transactions 

approach seems to have at least two disadvantages, 

viewed from the perspective of the occupational employment effect of Federal programs. One of these is 

that the occupational patterns related to any particular source of employment are purely a function of the 

industry mix. In this respect, the same occupational 

pattern applies whether the delivery of the industry’s 

output is to total final demand or to any segment of 

that total such as the Federal defense sector. Yet, 

occupational patterns can vary markedly within industries as the result of differences in product mix, as in 

electronics, for example.67 This difficulty might be

66 For the purpose of measuring Federal effect, the national

economy usually is the relevant base for the input-output

model. However, it is also possible to construct input-output

models representing transactions within a region and between

regions in a national economy. For a brief discussion of

regional input-output analysis, see William Miernyk, op. cit.,

chapter 4, pp. 58-77.

67 The occupational distributions of the military-space and

the consumer products sectors differ greatly in electronics

manufacturing. See Employment Outlook and Changing Occupational Structure in Electronics Manufacturing (BLS Bulletin 1363, 1963), p. 37. See also the discussion in Joseph F.

Fulton, “Employment Impact of Changing Defense Programs,” Monthly Labor Review (May 1964), pp. 511-513.

22

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
reduced, but not altogether eliminated, by a larger, 

more detailed input-output table and correspondingly 

more detailed employment coefficients and industry 

employment patterns. However, this difficulty is not 

unique to input-output analysis, but is a limitation on 

most other practical approaches to estimating occupational requirements.

The other disadvantage, which, however, may be 

particularly apt to Federal program activity, is that the 

approach is relatively insensitive to changes in the job 

content of occupations, especially the character of 

work. Occupational requirements for a planned Federal program derived by the interindustry approach in 

the manner described in this chapter will not be meaningful if the related job content is radically different. 

The NASA experience is opposite to this point, namely 

the need to develop a unique scheme of occupational 

classification reflecting the job content of its own work 

force. Similarly, the approach has no practical way of 

descriminating among the various uses of scientific and 

technical manpower, especially between R&D and 

other work performed by scientists and engineers.

For practical purposes, however, the limitations just 

discussed appear to be tolerable. Other approaches to 

estimating manpower requirements for new Federal 

programs and developments would encounter similar 

problems of undifferentiated occupational patterns and 

significant differences in job content. Supplementary 

information and special care in interpreting results 

should be sufficient in most cases to deal with these 

problems.

Deficiencies and gaps in the basic sources of data 

may impose a more serious limitation on the potential 

use of the interindustry transactions approach in the 

near future. The results illustrated in this chapter 

cover only private industry and a segment of State 

and local government. Other sectors in which there is 

substantial Federal support, such as higher education 

and other nonprofit organizations, remain practically 

uncovered. Estimates of employment in these sectors 

not only had to be derived by other means, but also

Table 11. Industrial distribution of estimated engineering employment, by source of support, 1965

Industry

All

sources

Department

of Defense

Other Federal

Government

All industries (n u m b er)...................... 863,657 106,803 41,058

Total (in percent).................................. 100.0 100.0 100.0

Agriculture, forestry and fisheries............... 0.3 ( • ) 0.3

M ining.................................................................... 4.4 0.9 1.4

Construction......................................................... 8.7 1.9 7.4

Manufacturing..................................................... 64.4 91.2 80.1

Durable goods................................................. 55.4 88.8 74.2

Nondurable goods.......................................... 9.0 2.4 5.9

Transportation..................................................... (■) O ) O )

Communications and public utilities............ 4.3 1.0 2.0

Trade...................................................................... 1.8 O ) 0.2

0 4 ( i ) ( i )

Services and miscellaneous............................. 14.7 4.8 8.0

1 Less than 1 /1 0 of 1 percent.

NOTE: Figures may not add to total because of rounding.

Table 12. Industrial distribution of estimated scientist 

employment, by source of support, 1965

Industry

All

sources

Department

of Defense

Other Federal

Government

All industries (n u m b er)...................... 224,743 13,311 8,646

Total (in percent).................................. 100.0 100.0 100.0

Agriculture, forestry and fisheries............... 7.6 1.5 12.1

Mining.............................................................. 7 7 4.8 3.0

Construction......................................................... 0.8 (l) 0 7

Manufacturing...................................................... 53.3 77.2 67.2

Durable goods............................................. 20.0 61.3 34.1

Nondurable goods...................................... 33.3 15.9 33.1

Transportation.....................................................

Communications and public utilities............ 0.7 0.3 0.3

Trade.................................................. 2.0 0.3 0.2

Finance, insurance and real estate............... 0.4 O ) (>)

Services and miscellaneous............................. 27.5 15.4 16.1

' Less than 1 /1 0 of 1 percent.

NOTE: Figures may not add to total because of rounding.

lacked corresponding occupational detail. Presumably 

both aspects for those and similar sectors could be 

developed and the sectors integrated into a basic inputoutput table. So far as is known, data sources adequate 

for this purpose do not yet exist.

A subsidiary issue of possible future importance is 

the reliability of the occupational coefficients used in 

estimating occupational employment. How important 

this issue may be depends on the degree to which 

occupational detail is wanted. Total industry employment generated by the interindustry technique is derived from coefficients based on establishment payroll 

reports. The general basis for the occupational matrix, 

on the other hand, is the decennial census adjusted for 

broad occupational groups and a few detailed occupations with data from the Monthly Report on the Labor 

Force, to reflect changes in intercensal periods. The 

occupational coefficients for all of the scientific occupations and for total engineering employment applied 

in this study, however, were based on establishment 

data, which are believed to be more reliable. Only the 

breakdown of the engineering specialties was based 

on census sources.68 Should the need arise for more 

extended occupational coverage of federally supported 

employment, increases in the error of estimated occupational employment are likely because of the present 

patchwork character of the industry-occupation matrix.

68 For a complete explanation of the construction of the

occupational employment patterns, see BLS Bulletin 1599,

pp. 4—8. Consideration was given to the BLS S u r v e y o f S c ie n ­

tific and T ech n ica l P erso n n el in In d u str y as an alternative

source of occupational patterns. The necessary ingredients—

total employment in an establishment and occupational detail

— are collected in the scientific, professional, and technical

personnel programs within the framework of the Standard

Industrial Classification. The degree of occupational detail is

much less than in the patterns used, however, consisting of

four distinctive physical science occupations, two life science

occupations, and mathematicians, but no detailed engineering

specialties. Considering this limitation, the very large amount

of preparation required to construct alternative patterns did

not seem worthwhile.

23

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
In contrast to the foregoing, the data base and industrial classification scheme of the interindustry tables 

may conceal useful information. As noted, the Federal 

bills-of-goods currently available include only purchases of goods and services ; other Federal programrelated expenditures, especially grants-in-aid to State 

and local governments, are excluded. It was possible 

to construct a partial Federal bill-of-goods representing Federal expenditure in this sector, but the results 

aggregate scientists and engineers employed in publicly 

controlled universities and colleges with those employed in other State and local governmental functions. 

Scientists and engineers employed in privately controlled institutions of higher education are also lumped 

with those serving in other institutions, including nonprofit organizations. Employment in public and quasipublic institutions in 1965 probably constituted over 

10 percent of total scientist and engineer employment, 

and played a proportionately even larger role in Federal programs. It is an anomaly that there is substantial

detail on the disbursement and use of Federal funds 

in these performer sectors, but little or no information 

on the resulting deployment of manpower. An expanded bill-of-goods including colleges and universities and nonprofit organizations as distinctive sectors 

and corresponding occupational patterns might be 

considered as one solution to this problem.

The foregoing considerations tend towards one overall conclusion. The interindustry transactions approach 

is a useful and adaptable tool for estimating or measuring the manpower implications of Federal programs, 

but its effectiveness is highly dependent on the quantity and quality of the data employed. This chapter 

has indicated some of the deficiencies in the data available insofar as they relate to Federal programs. Overcoming these deficiencies would not in itself make use 

of the interindustry transactions approach superfluous-, 

but reserved for later discussion and judgment is the 

practical question of how the data deficiencies might 

be remedied.

24

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Chapter V. Scientists and Engineers in the Federal Government

In terms of accuracy of estimate and occupational 

detail, information on the employment of scientists 

and engineers in the Federal Government is unmatched 

in any other sector. Since at least 1954, the U.S. Civil 

Service Commission in cooperation with the National 

Science Foundation has developed a continuing survey 

of scientific and technical manpower covering all but 

a few of such employees in Federal departments and 

independent agencies. The occupational classifications 

are convertible to those used in other sectors, but provided in greater and more specialized detail. With the 

introduction of a scheme of functional or character of 

work classification in 1967, the results of future surveys 

should be analytically even more useful than those 

already available.69

The distribution of Federal scientists, engineers and 

allied occupations by program categories is a significant dimension of the total effect of Federal program 

activity and expenditure. Employment of scientific and 

technical manpower in the Federal Government has 

been increasing much more rapidly than total Federal 

employment. Federal scientists and engineers constitute a substantial fraction of total employment in the 

scientific and technical occupations as well as in some 

particular occupations, although in recent years this 

fraction has not been growing. In some particular 

occupations intramural employment may represent a 

very sizable, even a major share of federally supported 

science and engineering employment.

Several sources of data are combined in this chapter 

to achieve two objectives. One of these, is to estimate 

by scientific and engineering specialty the share of 

in-house Federal employment in total occupational 

employment. The other objective is to distribute 

employment in selected science and engineering occupations into categories representing the structure of 

Federal programs. As background, a brief account of 

trends in the employment of scientists and engineers 

in the Federal Government is provided.

Recent trends in Federal scientist

and engineer employment

In 1966, 193,000 scientists, engineers and certain 

health personnel were reported to be employed by the 

Federal Government.70 Even on a more restricted definition, mainly excluding health personnel and the

social and behavioral sciences, the employment of 

131,000 remaining scientists and engineers is impressive. Federal employees were nearly 10 percent of the 

total employed in scientific and engineering occupations in 1966; Federal employment in all occupations 

was only about 4 percent of total nonagricultural 

employment.

Growth of employment of scientists and engineers in 

the Federal Government during the post-World War 

II years has been markedly greater than the growth of 

the Federal civilian work force. Table 13 shows that 

the total Federal work force was nearly stable throughout the period, increasing by less than 2 percent. At 

least since 1957, on the other hand, Civil Service 

scientists and engineers have been increasing by an 

annual rate of more than 4 percent. The number of 

physical scientists, mathematicians and engineers in 

the Federal service in 1965 was nearly twice the 

number in 1951. Scientists more than doubled their 

numbers, and engineers increased their numbers by 

about 75 percent. By 1965, the proportion of scientists 

and engineers in the Federal civilian work force was 

more than twice the proportion of scientists and engineers in the country.

Science and engineering employment in all sectors, 

however, has been growing more rapidly than Federal 

employment in these occupations. The estimated share

Table 13. Total civilian employment and scientists and 

engineers, Federal executive branch 1951-65

[In thousands]

Total

Total

employment

Scientists

and

engineers

Percent

of

total Scientists1 Engineers

1951...................................... 2,456.0 70.7 2.9 25.6 45.1

1953..................................... 2,532.0 84.9 3.4 33.1 51.8

1955...................................... 2,371.0 81.5 3.4 32.7 48.8

1957 2,391.0 90.1 3.8 36.5 53.6

1959 2,355.0 97.7 4.1 39.2 58.5

1961...................................... 2,407.0 102.2 4.2 40.4 61.8

1963..................................... 2,490.0 120.3 4.8 47.3 73.0

1965..................................... 2,496.0 132.0 5.3 52.4 79.7

' Excludes social scientists, psychologists, health personnel.

SOURCE: Total Federal employment, Budget of the United States, Special

Analysis I, 1970, table 1-4, p. 109; engineers and scientists, from NSF, Employment of Scientists and Engineers in the United States, 1 9 5 0 -6 6 , (NSF

6 8 -3 0 ), tables A1 to A4.

69 See discussion in section on “Data Gaps in Federal

Employment Statistics.”

70 Scien tific a nd T ech n ica l P erson n el in the F ed era l G o v ­

er n m en t, 1 9 6 6 , National Science Foundation (NSF 68-16,

1968), p. 1.

25

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 14. Total and Federal intramural scientists and engineers selected years, 1951-65

[In thousands]

Year

Total

scientists

and

engineers

Federal

scientists

and

engineers

Percent

Federal

All

scientists

Federal

scientists

Percent

Federal

All

engineers

Federal

engineers

Percent

Federal

1951...................................................................................... 606.1 70.7 11.7 159.0 25.6 16.1 447.0 45.1 10.1

1953...................................................................................... 741.9 84.9 11.4 189.6 33.1 17.4 552.2 51.8 9.4

1955...................................................................................... 806.3 81.5 10.1 208.5 32.7 15.7 597.8 48.8 8.2

1957...................................................................................... 952.7 90.1 9.4 248.9 36.5 14.7 703.8 53.6 7.6

1959...................................................................................... 1,051.3 97.7 9.3 287.5 39.2 13.6 763.8 58.5 7.6

1961.................................................................................... 1,144.6 102.2 8.9 316.0 40.4 12.8 828.5 61.8 7.5

1963...................................................................................... 1,273.5 120.3 9.4 355.1 47.3 13.3 918.3 73.0 7.9

1965...................................................................................... 1,361.3 132.1 9.7 395.5 52.4 13.2 965.8 79.7 8.2

SOURCE: Employment of Scientists and Engineers in the United States, 1 9 5 0 -1 9 6 6 (NSF 6 8 -3 0 ).

of intramural employment fell from 12 to under 10 

percent of total science and engineering employment 

during the 1951 to 1965 period, despite very large 

increases in the absolute numbers during the period. 

(See table 14.) The decline appears to have slowed 

in 1957, however, and the shares of Federal scientists 

and engineers have since remained more or less stable. 

A contributing factor may have been the relatively 

slow rate of growth of intramural Federal spending on 

research and development, which has been increasing 

at roughly half the rate of total Federal support of 

science and technology.71

Intramural occupational employment patterns

Employment of scientists and engineers in the Federal Government varies among occupations as a share 

of total occupational employment. Table 15, which 

shows the extent of such variation, was constructed 

from NSF-BLS estimates of occupational employment 

by sector.72 To maintain consistency with occupational 

estimates developed in chapter IV, the estimates are 

for 1965.

Engineers employed in the Federal Government 

outnumber scientists in the ratio of 3.2. Flowever, only 

about 8 percent of all engineers are Federal employees, 

but approximately 13 percent of scientists in 1965 were 

in the Federal service. In some particular occupations,

71 In the period 1955 to 1965, total Federal support of

R&D increased 477 percent, but intramural R&D spending

increased by only 245 percent, resulting in a reduction of the

latter from 37 percent in 1955 to 22 percent of Federal R&D

spending in 1965. National Science Foundation, Federal

Funds for Research, Development, and Other Scientific Activities (Vol. X V I, NSF 67-19), table C-86, p. 216. A variety of

reasons could account for the shift in the composition of

federally supported R&D employment. A sensitive manpower

information system could detect some of these factors, such

as program developments affecting the functional requirements for scientists and engineers, or shifts in the structure of

Federal programs.

72 As reported in National Science Foundation, Employment of Scientists and Engineers in the United States,

1950-66 (NSF 68-30, September 1968).

73 For example, see Budget of the United States, Special

Analyses, Fiscal Year 1969 (table F-l, p. 71).

the Federal share is more than twice the overall share 

of all scientific occupations, as in the case of agricultural scientists. Such differences undoubtedly reflect 

differences in the scientific and technological requirements of different Federal programs. Accordingly, the 

next section is an effort to distribute occupational 

employment in the Federal Government by broad program categories.

Government scientists and engineers

in Federal programs

Data on employment of scientists and engineers in 

the Federal Government currently are available only 

in terms of the agencies in which they work. To 

convert agency employment of an occupation to a 

program basis, each occupation was assumed to be 

distributed among programs in the same proportions 

as total white-collar employment in Federal agencies. 

The distribution of white-collar employment among 

programs, however, also had to be estimated. To make 

a program distribution of employment it was assumed 

that if an agency contributes directly to more than one 

program, its white-collar employment is proportionate 

to its current expenditure, exclusive of trust and similar funds, in each program.

Table 16 shows how agency white-collar employment was distributed in program categories. The 

employment data on which the percentages are based 

is for October 31, 1967, because the U.S. Civil Service 

Commission did not conduct a survey of Federal whitecollar employment in 1965. A finer departmental or 

agency breakdown, such as is available for total civilian employment in the Budget,73 undoubtedly would 

produce somewhat different distributions among the 

program categories, including fewer employees in the 

“Other Programs” category. Such a breakdown is not 

available for white-collar workers or for any of the 

scientific and engineering occupations, however.

Table 17 summarizes the program distribution of 

scientists and engineers employed in the Federal Government in October 1966. The occupational data are

26

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
from a recent National Science Foundation report,74 

based on information supplied by the U.S. Civil Service Commission. The occupational classes used have 

been adjusted, principally by grouping detailed occupations, to conform to those used in the historical 

employment series,75 and thus arc comparable with the 

definitions of scientists and engineers in other sectors. 

Before grouping, however, each detailed occupation 

was distributed in accordance with the white-collar 

employment distribution shown in table 16 and discussed previously. This method undoubtedly results in 

some distortion from a true program distribution of 

Civil Service scientists and engineers. Although no independent means of checking the validity of the resulting distributions is available, apparently the numbers 

actually employed in the areas of national defense and 

of commerce and transportation may be larger than 

indicated, and the agricultural resources and health 

and welfare areas may be smaller than these estimates.

In terms of relative orders of magnitude, total inhouse employment of scientists and engineers generally 

is similar to the occupational pattern of federally 

supported employment in other sectors. Employment 

in national defense programs makes up nearly half of 

the total for all such occupations. Defense employment, 

furthermore, is more heavily concentrated among the 

engineering occupations than among the scientific 

specialties except for mathematicians and physicists. A 

detailed breakdown of occupational employment by 

program is shown in appendix E.

Data gaps in Federal employment statistics

From a methodological viewpoint, the degree of 

detail on occupational employment in agencies or programs considerably exceeds the level available in other 

sectors. There are no open-ended categories. Thus the 

“other occupation” category for scientists and engineers in the Federal service does not have the same 

meaning as in the other sectors.76 Again, this is an 

instance of data “loss” resulting from the incompatibility of definitions and classifications of different Federal statistical systems.

Two data gaps limit the coverage and the analytic 

utility of data on scientists and engineers employed 

in the Federal Government. One is the problem of 

estimating the uniformed scientists and engineers employed in the Armed Forces. The other is the issue of 

the functional distribution of scientists and engineers 

in all branches of the Government.

Military personnel working as scientists or engineers 

may constitute a significantly large group of federally 

supported scientific and technical manpower. Although 

accurate and meaningful data on employment and 

occupation are not available, the number of uniformed 

personnel currently working as scientists and engineers 

may approach 25,000. Recent estimates from the

Table 15. Total and intramural employment of scientists and engineers, engineers, selected occupations, 1965

[In thousands]

Occupation

All

employees

Federal

employees Percent

Federal as

percent

of

total

All scientists and engineers... 1,361.3 132.1 100.0 9.7

Engineers, technical................................ 965.8 79.7 60.3 8.3

Scientists.................................................... 395.5 52.4 39.7 13.2

Chemists............................................ 116.0 8.2 6.2 7.1

Agricultural scientists.................... 44.7 15.5 11.7 34.7

Biological scientists........................ 55.6 6.4 4.8 11.5

Geologists, geophysicists ........... 23.6 2.8 2.1 11.9

Mathematicians............................... 48.9 3.8 2.9 7.8

Physicists.......................................... 39.0 5.6 4.2 14.4

Other scientists............................... 67.7 9.3 7.0 13.7

SOURCE: National Science Foundation, Employment of Scientists end Engineers in the United States, 1 9 5 0 -1 9 6 6 (NSF 6 8 -5 0 , September 1968). Tables

A -l to A l l .

national registers show nearly 6,000 scientists employed 

in the Armed Forces in 1966,77 and 1,300 engineers in 

the military and public health services in 1964.78 

However, a special study, covering so-called engineering occupations, indicates that the four services in 1967 

had manning requirements for nearly 18,000 advanced 

degree holders, but an additional 7,000 with bachelor’s 

and first professional degrees—mainly in the Air Force 

—also may have been working in scientific and technical engineering assignments.79 On the other hand, 

nearly 34,000 military personnel held scientific and 

engineering degrees in 1967. Discussions with Department of Defense manpower specialists indicate that 

neither the Department as a whole nor the individual 

services have the information capability for estimating scientist and engineer employment. There is no 

uniform occupational classification scheme among the 

services, and no means of converting the categories 

used to a common scheme, principally because no

74 “Scientific and Technical Personnel in the Federal Government, 1966,” Reviews of Data on Science Resources (NSF

68-16, No. 14, April 1968), table A, pp. 14—16.

75 The detailed occupations included, excepting medical

scientists and the groupings follow those in National Science

Foundation, Employment of Scientists and Engineers in the

United States, 1950-1966, pp. 49-51.

76 “Other” categories in most employment surveys usually

reflect either specialized occupations too small in number to

justify separate classification or, more often, occupations

whose unique characteristics present unusual problems of

classification. Ambiguity of response may also contribute to

classification in this open-ended category. In contrast, the

“other” categories used to distribute Federal Government

scientists and engineers in this study resulted only from the

exclusion of certain detailed occupations which, however,

have distinctive classification in the Civil Service scheme.

77 American Science Manpower, 1966, National Science

Foundation (NSF 68-7, Washington, D.C., 1967), tableA-8,

p. 67.

78 Engineering Manpower in Profile, Engineers Joint Council (New York, 1964), table 5, p. 16.

79 “Engineers in Uniform,” Engineering Manpower Bulletin

(Manpower Bulletin No. 9, December 1967).

27

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 16. Percent distribution of agency white-collar employment in the Federal Government, by program,

selected agencies October, 1967

[In thousands]

Department or agency All

programs

National

defense

International

affairs Space

AgricultureNatural

resources

Commerce

transportation

Housing

development

Health

labor and

welfare

Veterans

affairs

Other

programs

All agencies................................................. 1,926.1 32.8 1.8 1.5 3.4 3.5 3.9 0.7 5.8 6.0 40.4

S tate............................................................................ 24.5 — 99.0 — 0.6 — — — — — 0.4

DOD............................................................................. 629.9 98.0 — — — 2.0 — — — — —

In te rio r....................................................................... 53.5 — — — — 91.0 — — 9.0 — —

Agriculture................................................................ 85.2 — 13.0 — 78.0 9.0 — — — — —

Commerce.................................................................. 24.8 — — — — — 100.0 — — — ----

Labor........................................................................... 9.5 — — — — — — — 100.0 — —

HEW............................................................................. 96.9 — — — — — — — 100.0 — —

AEC .............................................................................. 7.0 100.0 — — — — — — — — —

H U D .............................................................................. 14.5 — — — — — — 100.0 — — —

NASA........................................................................... 29.2 — — 100.0 — — — — — — —

T V A .............................................................................. 6.7 — — __ — 100.0 — — — — —

V A ................................................................................ 116.2 — — — — — — — — 100.0 —

Other agencies or departments.......................... 828.2 — — — — — — — — — 100.0

SOURCE: U.S. Civil Service Commission, Occupations of Federal W hite-Collar Workers, October 31, 1967 (Washington, D .C ., 1968), table E.

operational purpose would be served by such a system. 

Since the primary duty of uniformed personnel is generally defined as a military function, less attention is 

paid to the technical requirements of particular military jobs with exception of those which may be unique 

to the services.

The other gap in the data on employment of scientists 

and engineers in the Federal Government is the lack 

of a functional breakdown. Until recently, only very 

crude estimates of the functional breakdown of Federal scientists and engineers have been made. In 1967, 

the U.S. Civil Service Commission in cooperation with 

the National Science Foundation instituted a functional classification of scientists and engineers, using a 

20-category code to identify various functions.80 Preliminary results of this new reporting scheme indicate 

that in May 1967 about 30 percent of scientists and 

engineers in the Federal Government were engaged in 

research and development. A final report of the results 

is expected to be published in the near future.

Table 17. Civilian scientists and engineers in the Federal 

Government, by program, October, 1966

Program

Scientists

and

engineers

Natural

scientists1 Engineers

All programs......................................................... 131,087 54,255 76,832

National defense.............................................................. 61,492 14,468 47,024

International affairs........................................................ 3,097 2,338 759

Space research and technology................................... 13,646 4,769 8,877

Agriculture and agricultural resources..................... 15,605 13,202 2,403

Natural resources............................................................ 16,097 8,352 7.745

Commerce and transportation..................................... 9,098 4,208 1,890

Housing and development............................................ 554 5 549

Health, labor and welfare.............................................. 5,803 4,346 1,457

Veterans affairs................................................................ 1,527 1,021 506

Other programs................................................................ 4,168 1,546 2,622

1 Includes mathematicians.

Summary and evaluation

Since by definition and institutional relationship all 

scientists and engineers employed in the Federal 

Government are also federally supported, there is no 

ambiguity in determining the relationship of their 

employment to Federal spending. The effect, so to 

speak, is 100 percent. The data source available for this 

group, moreover, is detailed and amenable to consolidation into categories comparable with the occupational definitions applied to other sectors. At the time 

of this study, data on the functional character of Federal employment were being developed. The absence 

of data on the utilization of scientists and engineers in 

the Armed Forces, on the other hand, is also of some 

consequence.

The principal deficiency in the intramural sector, 

however, is the absence of a program classification. A 

crude rearrangement of agency employment in 1966 

has been attempted, to show the relationship of science 

and engineering employment to the broad goals of the 

Federal Government for planning purposes. Indeed, it 

is only in this sector that plausible distributions of 

scientist and engineer employment both among programs a n d in sufficient occupational detail were possible. If similar and comparable constructions were possible for all other sectors, even at the broad level 

achieved in the Federal Government sector, it would 

be an important step toward a manpower information 

system capable of measuring Federal influence.

80 A description of the functional classes and the reporting

requirements are in U.S. Civil Service Commission, F ed era l

P erso n n el M a n u a l S y s te m , F P M L e tte r , No. 293-9, March

24, 1967.

28

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Chapter VI. Total Federal Effects and Implications for the Scientific 

and Technical Manpower Information System

The attempt to estimate employment of scientists 

and engineers supported by Federal funds in each 

of the various economic sectors has been completed. 

Three tasks remain: (1) To consolidate the results, 

bringing together intramural and extramural employment estimates to measure the total effect of Federal 

spending; (2) to provide illustrations of some applications of the methods of estimate with data presently 

available; and (3) most important of all, to evaluate 

the scientific and technical manpower information 

system and to recommend lines of improvement and 

further study of the Federal effect. These are the objectives of this chapter.

Total Federal effect on employment

Federal programs vary with respect to both their 

shares of the total utilization of Government-supported 

employment and the proportion of scientists and engineers employed in the Federal service. Table 18 shows 

the estimated employment of scientists and engineers 

according to the source of support and the program 

categories of those supported by Federal funds. Both 

employees of the Federal Government (except military 

personnel) and those employed in other sectors are 

included in the estimates of federally supported employment. Although a little less than an estimated 30 

percent of all scientists and engineers employed in 

1966 were supported by Federal funds, the table readily 

indicates that more than half of this number were employed in national defense programs. This proportion 

is probably on the conservative side, since some scientists and engineers classified in other areas, for example, space research, are known to be working in 

activities directly or indirectly related to defense. Finer 

program detail and identification of expenditure and, 

at least, intramural employment would have permitted 

a more accurate distribution of employment.

Estimates of the proportions of scientists and engi81 For example, agricultural or the industrial and business

community. In such programs, a substantial part of the program output is information rather than physical services.

82 See pp. 30-33.

83 A number of such nonprofit organizations are almost

completely dependent on government contracts and grants.

See chapter II, this bulletin, pp. 3-16.

neers employed in the Federal Government in each 

of the program areas are also shown in table 18. Differences in the extent of in-house employment among 

the programs are quite marked. There is no easy generalization about these differences, which range from 

16 percent of program employment in space research 

and technology to more than 90 percent in commerce 

and transportation. The nature of the complementary 

inputs used in the program, for example, experimental space vehicles, the nature of the program output, 

especially the clientele directly served,81 the existance 

of established government-owned facilities, such as 

laboratories and agricultural experiment stations, and 

the pace of legislative and environmental changes 

in the area comprehended by the program, are undoubtedly among the factors contributing to such 

differences. Direct and intensive study, is needed to 

establish the particular factors involved and to evaluate their respective influences. For the time being, 

however, even estimates as crude as these have some 

analytic value, as will be demonstrated in the next 

section.82

Tables 19 and 20 are distributions of federally supported employment of scientists and engineers by sector as well as source of support. The employment 

estimates in this instance are for 1965, instead of 1966, 

because of the need to key the estimates of all other 

sectors to the largest sector, private industry. Estimates 

of Federal effect for that sector are based on the interindustry transactions approach, for which data were 

available only for 1965. Table 20 again shows that the 

overall Federal effect is nearly 30 percent of the total 

of employed scientists and engineers. Although precise 

data are not available, this estimated share probably 

would not be significantly affected by the addition of 

scientists and engineers in the armed services. Such 

additional data, of course, would alter the proportions 

of in-house employment and the occupational profile of 

Federal manpower utilization; very likely the engineering occupations, mainly located in the defense programs, would show heavier concentrations of Federally 

supported employment.

The percent of federally supported extramural employment, as shown in the tables varies between the 

sectors, the largest extramural sectoral shares occur in 

the universities and colleges and the independent nonprofit organizations.83

29

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 18. Estimated Federal utilization of scientists and 

engineers, selected programs, 1966

[In thousands]

Source of support and program

All

scientists

and

engineers Percent

Percent

employed

in Federal

Government

All sources of support........................................ 1,412.5 100.0 9.3

Federally supported........................................................ 392.8 27.8 33.4

National defense.............................................................. 209.1 14.8 29.4

Space research and technology................................... 83.0 5.9 16.4

Agriculture and agricultural resources..................... 20.8 1.5 75.0

Natural resources............................................................. 17.9 1.3 89.9

Commerce and transportation...................................... 10.0 0.7 191.0

Health, labor and w elfare2............................................ 33.7 2.4 17.2

Other Federal programs................................................. 18.3 1.3 51.4

1 Excludes employees of the Post Office.

1 Includes National Science Foundation.

SOURCES: Tables 3, 5.

Two of every three scientists and engineers involved 

in Federal programs are located in one or another of 

the four extramural sectors, but, as earlier analysis of 

federally supported R&D employment indicates, they 

are apparently concentrated in a few program areas.

Data gaps affecting the functional and occupational 

dimensions partially block further analysis of the total 

Federal effect on the employment of scientists and engineers. The blockage is partial because data deficiencies in these two dimensions vary among the sectors. 

Occupational or field-of-science estimates of Federal 

effect are more or less satisfactory for private industry, 

universities and colleges, and the civilian branches of 

the Federal Government. Such a breakdown, on the 

other hand, is not possible for either the independent 

nonprofit organizations or State and local governments.

In both of these sectors, there are no Federal expenditure data by field of science, even for R&D scientists 

and engineers.84 Sectoral breakdowns of employment 

of scientists and engineers in terms of the character of 

the work are possible on a crude basis for all sectors, 

but the estimated employment of R&D scientists and 

engineers in the Federal Government is at present 

dependent on an extrapolation of trends in R&D costs 

per scientist-engineer man-year and Federal spending

Table 19. Estimated employment of scientists and engineers, by source of support and sector, 1965

[In thousands]

Sector

All

sources

Federal

support

Other

support

All sectors.............................................................. 1,361.3 393.4 967.9

Federal Government1...................................................... 132.1 132.1 _

Other sectors..................................................................... 1,229.2 261.3 967.9

Private industry................................................................ 960.9 169.8 791.1

Universities and colleges............................................... 171.1 68.3 102.8

Independent nonprofit organizations........................ 14.0 10.7 3.3

State and local government.......................................... 83.2 12.5 70.7

1 Civilian only.

SOURCE: Scientists and engineers, all sources of support, and scientists and

engineers employed in the Federal Government are from National Science Foundation, Employment of Scientists and Engineers in the United States, 1 9 5 0 -6 6 ,

NSF 6 8 -3 0 , table A - l. All other sectors based on derived estimates.

on research and development.85 The estimates of federally-supported employment by character-of-work 

and by field-of-science, and in each case by sector 

involved, are shown in tables 21 and 22. Regrettably 

these two dimensions cannot be concurrently analyzed 

in the framework of Federal spending and programs, 

since there is ample evidence of field-of-science variation in cost per man-year.86

Little comment is required on the substantive aspects 

of table 21. The principal difference between this table 

and a similar table in chapter III is the addition of the 

R&D scientists and engineers estimated to be employed 

in the Federal Government. The estimates of federally 

supported employment are derived from the ratios 

developed in that chapter, but applied insofar as possible to 1965 data in order to maintain a rough temporal consistency. Clearly, the influence of Federal 

programs and funds on the utilization of scientists and 

engineers engaged in research and development is 

much greater than their influence on total scientistengineer employment.

The field-of-science distribution shown in table 22 

requires more extensive comment. The consolidation 

of the estimates of Federal use of scientists and engineers into broad fields of science was necessitated by 

the differences between employment and expenditure 

classifications. Detailed estimates of occupational employment are available, or can be derived for the Federal Government, private industry, universities and 

colleges, and for the independent nonprofit organization sectors. However, only data for universities and 

colleges on R&D expenditures are segregated by source 

of funds and reasonably well matched to the employment data in each of the detailed fields of science.87 

In all other sectors R&D expenditures are available, in 

published form at least, for three broad fields of 

science only. Expenditure data in all sectors for nonR&D functions are also available only on a broad field84 Tabulations of Federal expenditures on science and technology in the National Science Foundation series, Federal

Funds, show expenditures by field of science and by performer, but no cross-tabulation of these two dimensions. In

the case of private industry and the universities and colleges,

however, the surveys conducted in those sectors include sufficient information on total as well as R&D spending by source

of funds to permit the estimates of employment developed in

this study.

85 National Science Foundation, Employment of Scientists

and Engineers in the United States, 1950-66, p. 51. Only

intramural spending provided the base and trend data.

86 For example, in the independent nonprofit organization

sector, annual costs per scientist or engineer man-year in

January 1965 varied from $19,300 for the field of mathematics to $48,900 in the engineering sciences, as calculated

from data in National Science Foundation, Scientific Activities of Nonprofit Institutions, 1964 (NSF 67-17, 1967).

87 It is assumed that the employment and expenditure data

in a given sector match, though it is possible that an individual working as a physicist actually might be employed in

another field of science.

30

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 20. Federally supported employment as a percent 

of total employment of scientists and engineers, 1965

[In thousands]

Sector

Federally

supported

Percent

fed eral1

Percent of

total

federally

supported

All sectors.............................................................. 393.4 29 100.0

Federal Government........................................................ 132.1 100 33.6

Extramural sectors........................................................... 261.3 21 66.4

Private industry................................................................ 169.8 18 43.3

Universities and colleges............................................... 68.3 40 17.3

Independent nonprofit organizations........................ 10.7 76 2.6

State and local governments........................................ 12.5 15 3.2

1 Civilian only.

SOURCE: Table 6.

of-science basis. Thus, the problem of data lies more 

in identifying funding sources, expenditures and costs 

than in the area of occupational employment per se.

As a consequence of the foregoing data problems, 

the sectoral contributions to each of the fields-ofscience are not strictly additive. In addition, data for 

the Federal Government sector relate to October 1966, 

while the estimated contributions of the other sectors 

are centered near January 1965. At most, it is possible 

to say that relative Federal effect is least in the engineering fields and greatest in the life sciences resulting 

in about 40 percent of 1965 employment of scientists 

and engineers in the latter.

Ideally, occupational detail to the level used in the 

interindustry transactions approach should be available for all sectors. At present, however, that approach 

provides only for estimation of federally supported 

occupational employment in the private industry sector. Comparable occupational and functional detail— 

and then only for the sciences, not engineering—is 

available oniy for one other sector, the universities and 

colleges. Should these difficulties be overcome, either 

by developing consistent technical coefficients and corresponding occupational patterns for other sectors or 

by developing and broadening the scope of surveys of 

science and engineering manpower in other sectors, 

the functional dimension of employment would be lost 

in using that approach. At present, research and development is treated in the input-output tables as a direct sale from the various producing industries to the

88 For a more complete explanation of the method of treating research and development, see P ro jectio n s 1 9 7 0 (BLS

Bulletin 1536, 1966), p. 38.

89 For example, in 1966, 41 percent of employed scientists

engaged in research and development held the Ph.D. degree;

only 29 percent of those whose highest degree was the baccalaureate were so engaged. Calculated from National Science

Foundation, A m er ic a n S c ie n ce M a n p o w e r , 1 9 6 6 , (NSF 68-7,

December 1967), table A -9, p. 70.

90 This is not alone a matter of selective publication of

survey results, but a question of design. Lack of coverage of

costs and employment in the non-R&D scientific and engineering work force, in most sectors covered by the NSF surveys, is an example.

purchasers in the final demand sectors, such as the 

Federal Government.88 Consequently, no distinction 

can be made between personnel engaged in R&D and 

those engaged in other types of work. This would not 

be serious if it could be safely assumed that scientists or 

engineers in any given occupational category are functionally interchangeable. Limited information on this 

point, however, suggests otherwise.89

Applying the estimates

The critical test of an information system is the 

degree to which it can provide answers to significant 

questions within the system’s domain. A few of the 

manpower information systems considered in this study 

apparently have been designed to meet specific needs, 

such as the Economic Intelligence System sponsored 

and managed by NASA and the Department of Defense. However, the majority of the systems are general 

purpose systems, even though concerned in each case 

with particular sectors. Consequently, they suffer from 

the practical limitations of such systems, including a 

lack of sufficient analytic detail,90 while providing general answers to a variety of issues.

The information system synthesized in this study, 

despite sharing the limitations referred to above can 

answer some specific questions in the area of Federal 

program planning. Three have been chosen as a test 

of the data sources and the applicability of the approaches used. The answers provided are necessarily 

broad, and moreover, there is no measure of the 

degree of precision. Nevertheless, they may also serve 

to illustrate further needs for change or improvement 

in the information system. The questions to be answered, in order of increasing specificity, are:

1. Has utilization of scientists and engineers in 

Federal programs increased more rapidly than total 

employment in those occupations? Subsidiary to this 

question are related questions such as the nature of 

the change in the structure of the federally-supported 

scientist and engineer work force, such as the division 

between intramural and extramural employment, or

Table 21. Estimated employment of R&D scientists and 

engineers, by sector and source of support, 1965

[In thousands]

Sector

R&D

scientists

and

engineers

Federally

supported

Percent

Federal

All sectors.............................................................. 504.3 280.6 56

Federal Government........................................................ 65.7 65.7 100

Private industry................................................................ 357.0 157.1 44

Universities and colleges............................................... 64.5 46.4 72

Independent nonprofit organizations........................ 13.3 10.1 76

State and local governments........................................ J3.2 *1.3 41

1 Civilians only.

2 Full-tim e equivalent employments

SOURCE: NSF, Employment of Scientists and Engineers in the United States,

1 9 5 0 -6 6 , table A-2, Page 22. Table 11-4 ratios were applied to 1965 estimated

employment.

31

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 22. Estimated utilization of federally supported 

scientists and engineers, by field of science and sector,1 

1965

Sector All fields Engi neering

Physical

sciences2

Life

sciences

Em ploym ent (in thousands) 1360.7 965.8 253.7 141.2

Percent of total federally supported em ploym ent

Federal G o ve rn m en t3............................... 9.3 7.7 12.3 14.4

Private in d u s try........................................... 12.4 15.3 7.0 2.9

Universities and colleges........................ 5.0 1.0 8.7 25.6

Indep endent nonprofit organizations. 0.7 ( 5) ( 5) ( 5)

S tate-local g o ve rn m e n t4.......................... 0.1 ( 5) ( 5) ( 5)

1 In clu d in g em ployees of fed erally funded research and developm ent centers

adm inistered by extram ural sectors.

2 Includes m athem atics.

3 October 1 9 6 6 em ploym ent.

4 R & D personnel only.

5 Included in sector to ta l.

SOURCE: Federal G overnm ent from NSF 6 8 - 3 0 , tables A - l to A l l .

between research and development and other activities. A satisfactory measure of the annual change in 

Federal demand can also be compared with the 

changes in the supply of scientists and engineers.

2. Given a major change in the structure of Federal programs but little change in the volume of expenditure, what are the implications for science and 

engineering manpower requirements? Specifically, how 

many scientists and engineers, would be released by a 

reduction in spending on the Viet Nam conflict, and 

how many could be absorbed by compensatory spending in other areas? What economic sectors are likely 

to be affected by postulated changes in program structure, and to what degree?

3. Given a change in the level of spending in a 

particular Federal program, what changes would be 

expected to occur in the detailed occupational requirements for scientists and engineers? At current rates of 

change in employment and in the aggregate supply of 

these occupations, can most of the displaced scientists

Table 23. Estimated total and federally supported employment of scientists and engineers, by sector and 

character of work, selected years

[In thousands]

Sector 1954 1957 1964 1966

Compound

annual rate of

growth, 1954-66

(Percent)

All scientists and engineers... 776.6 952.7 1,273.5 1,412.5 5.1

Federally supported................................ 209.7 238.7 431.3 426.8 6.1

Federal Government1.................... 79.7 90.1 126.4 134.1 4.4

Extram ural........................................ 130.0 167.9 304.9 292.7 7.0

R&D scientists and engineers... 237.1 302.3 490.5 520.5 6.8

Federally supported................................ 127.8 162.1 342.1 346.1 8.6

Federal Government1.................... 30.1 31.4 62.0 66.8 6.9

Extram ural........................................ 97.7 130.7 280.1 279.3 9.1

Civilian labor force2............................... 63,643 66,929 73,091 75,770 1.5

Nonagricultural employment2.............

Professional, technical and kindred

53,898 58,123 64,782 68,915 2.0

workers3................................................. 5,588 6,468 8,550 9,322 4.3

1 Civilian only.

2 16 years and over.

3 14 years and over.

SOURCE: Total employment ana total R and D employment, NSF 6 8 -3 0 , table

A -l; labor force, nonagricultural employment and professional, technical and

kindred, U.S. Department Labor, Manpower Adm inistration, Manpower Report of

the President, April 1967, tables A - l, A-9.

and engineers expect to be absorbed, or will they be 

vulnerable to sustained unemployment?

F e d e r a l p r o g r a m s a n d g r o w th o f d e m a n d f o r s c ie n ­

tists a n d en g in ee rs . Answers to the first question raised 

above were obtained by constructing a time-series built 

on the budget model described in chapter II. The 

employment estimates cover the period 1954—66, but 

are cruder than those developed in the earlier chapters. 

Data necessary to estimate employment in Federal programs by man-year expenditure estimates in particular 

sectors are not available on an annual basis, although 

for some sectors there are enough observations to 

permit more refined annual estimates by interpolation.

Table 23 shows the trends in the growth of employment of scientists and engineers and in the level and 

structure of federally supported employment in these 

occupations. Four different years were selected to 

exhibit these trends— the 2 terminal years, 1954 and 

1966; 1957, which is the beginning for most sectors of 

systematic and probably more reliable employment 

data;91 and 1964, which represents the period just 

prior to the Viet Nam buildup of defense program 

demand. The period 1957—64 also spans the buildup 

of the NASA manned lunar landing program.

Such a table permits analysis of changes in the pattern of utilization of scientists and engineers and its 

relationship to Federal programs. From the compounded annual growth rates, it is apparent that federally supported employment over the period 1954—66 

has been growing nearly a fifth more rapidly than total 

employment. Growth has been especially rapid among 

R&D scientists and engineers, whose total employment 

growth rate substantially exceeds that of total science 

and engineering employment. Between 1957 and 1966, 

the proportion of R&D scientists and engineers rose 

from 32 to nearly 37 percent of total scientist-engineer 

employment. Of the increase in R&D scientists and 

engineers— about 218,000— federally supported employment is estimated at 184,000, or about 84 percent. 

Federally supported R&D employment was 98 percent 

of the increase in total federally supported employment. The table also indicates a relative shift in 

federally supported employment toward increased 

utilization of extramural scientists and engineers. 

Among R&D scientists and engineers in Federal programs, the rate of increase of those employed outside 

of the Federal Government was nearly a third greater 

than employment of so-called in-house personnel. By 

1966, two of every three federally supported scientists 

or engineers were employed in the extramural sectors.

The findings summarized above could be extended 

to show the distribution of changes in Federal demand

91 Data collected before 1957 on science and engineering

employment are probably less reliable than in subsequent

years. Hence, discussion is confined to the latter period.

32

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 24. Supply and demand for scientists and engineers, 1958-66

[Numbers in thousands]

Year

Science and

engineering

degrees

conferred1

Change in employment

from previous year

Federally

supported

as percent of

degrees

conferred

All sources

of support

Federally

supported2

1958.......................... 96.9 42.4 20.9 21.6

1959.......................... 105.7 56.2 45.8 43.3

1960.......................... 110.1 46.0 8.1 7.4

1961.......................... 111.6 47.3 30.6 27.4

1962.......................... 116.2 59.7 32.6 28.0

1563.......................... 121.6 69.2 39.5 32.5

1964........................ 135.6 46.6 15.1 11.1

1965.......................... 145.9 41.2 — 1.7 —

1966.......................... 150.9 51.2 — 2.8

1 Bachelor’s and first professional, masters’ and doctoral degrees in engineering, agriculture, forestry, mathematics, biological science, physical sciences,

and general sciences programs. Year indicates end of academic year.

1 Civilian only.

SOURCES: 1 9 5 8 -6 3 , degrees conferred from National Science Foundation,

Scientific and Technical Manpower Resources NSF 6 4 -2 8 , tables V -1 2 , V—15,

and V—18, November 1964; 1 9 6 4 -6 6 , from Office of Education, Projections of

Educational Statistics to 1 9 7 6 -7 7 (1967 ed ), tables 20, 21, 22.

for scientists and engineers by broad program categories. Since the interest here is primarily in method 

rather than substance, the necessary exercises were 

not performed. On the other hand, the method does 

not provide for estimates of employment changes in 

the occupational specialties, or even by broad field-ofscience.

The pressures generated by changes in Federal programs and spending can also be evaluated by comparing the year-to-year changes in federally supported 

employment with the annual output of graduate scientists and engineers. Table 24 shows the results of such 

a comparison. The extfnt to which the annual reported output of the universities and colleges represents the effective supply cannot be ascertained, since 

some portion of the graduates at the bachelor’s, first 

professional, and master’s degree levels continue their 

formal education. Other science and engineering graduates in recent years have entered the Armed Services 

where, as indicated in chapter V, only about half (or 

less) may perform scientific or engineering tasks. The 

additional numbers who obtain scientific and engineering jobs by informal means, such as on-the-job 

training and upgrading, is practically unascertainable. 

On the other hand, the year-to-year changes in employment are exclusive of the changes in requirements 

resulting from retirement, deaths, or movement out of 

scientific and engineering fields.

Relative to the annual output of formally educated 

scientists and engineers federally supported demand 

appears from the estimates shown to vary greatly from 

year to year. On the average for he 9-year period 

shown in table 24, including 2 years in which federally 

supported demand showed an absolute decline, the 

annual Federal demand equaled almost a quarter of 

the earned degrees in the field. This proportion may 

understate the Federal effect on the effective supply of 

scientific and technical manpower, since substantial

and increasing proportions of bachelor degree recipients in those fields continue their education instead 

of entering industrial, academic or public employment.92 The decline in the last 2 years of the period 

may reflect the reduction in the space research program. Most of this reduction, in any case, occurred in 

the extramural sectors, which experienced a reduction 

of nearly 8,000 federally supported scientists and engineers between 1965 and 1966, mostly in the non-R&D 

extramural work force.

C h a n g e s in p r o g r a m s tr u c tu re a n d scie n c e a n d e n g in e erin g m a n p o w e r r e q u ir e m e n ts. Major changes in the 

structure of Federal programs may effect comparably 

large short-term dislocations of manpower, even if the 

total volume of Federal program spending (in constant dollars) remains about the same. Scientists and 

engineers released from Federal programs that have 

been cut back will need to find employment in their 

occupations either in the strictly civilian economy or 

in expanding Federal programs. If, in fiscal terms, 

such programs offset reduced spending elsewhere, will 

their manpower requirements exceed or fall short of 

the numbers of released workers? This section is an 

effort to answer such a question.

Estimates of the savings resulting from a reduction 

in Viet Nam military spending and proposals for compensatory spending can be tested for their manpower 

implications in science and engineering. These estimates are based on those in the report of the Cabinet 

Coordinating Committee on Economic Planning for 

the End of Viet Nam Hostilities.93 The Cabinet Committee estimates a fiscal year 1972 peace-and-growth 

dividend—a combination of reduced spending on Viet 

Nam and normal revenue growth—at $22 billion.94 

Since, however, there is no suitable method for projecting man-year costs of science and engineering employment, a substitute assumption is made that the 

spending on Viet Nam in fiscal year 1967 becomes 

immediately available for other uses. In addition, if it 

is assumed that there has been no rise in expenditures 

per scientist-engineer man-year between fiscal 1966 

and fiscal 1967, the manpower implications of reduced 

defense spending and spending on new initiatives can 

be examined.

92 This is evidenced in part by the general decline in the

proportion of bachelors’ and first-professional to all degrees

granted by institutions of higher education. According to one

special study of June 1958 degree recipients and candidates,

47 percent of baccalaureate degree recipients in the natural

sciences and mathematics and 22 percent of those awarded

first degree in engineering enrolled in graduate schools for

one term or more after receiving their degrees. National

Science Foundation, T w o Y ears A fte r the C o lle g e D e g r e e

(NSF 63-26, Washington, D.C., 1963), table 16, p. 29.

93 In E c o n o m ic R e p o r t o f the P resid en t, (January 1969),

pp. 181-212. The report is dated December 31, 1968.

94 Ibid., pp. 199-201.

33

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
A decline in defense spending of more than $22 

billion in fiscal 1967 would have reduced employment 

in the national defense programs by approximately 

79,000 scientists and engineers. This estimate was 

obtained by dividing the reduction in expenditures by 

the implicit expenditure per man-year of defense 

scientist and engineer employment— approximately 

$276,000 in 1966 dollars. This employment reduction, 

accepting the ratios of intramural to total federally 

supported employment in defense, would consist of 

about 23,000 scientists and engineers employed in the 

Federal Government and 56,000 employed in other 

sectors.

Let it now be assumed that $22 billion will be spent 

to expand existing programs or to undertake “new 

initiatives” along the lines and in the magnitudes 

indicated in the Cabinet Committee’s report.95 Selection of the particular programs was governed by the 

availability of appropriate man-year expenditure 

ratios, and do not represent any preference regarding 

social and political priorities.96 At the prices and costs 

assumed to prevail in fiscal 1967, new programs and 

program expansion in various nondefense areas would 

require nearly 39,000 more scientists and engineers 

than would be released by the reduction in Viet Nam 

spending. Nearly 4,000 of this increase in requirements, or 10 percent, would be added to the Federal 

Government’s payroll if current ratios of intramural 

to total employment in each of the program areas 

remain constant. Requirements for the economy as 

a whole for scientists and engineers would exceed the 

numbers released because of the so-called “peace 

dividend” by almost 55,000, if the assumed reduction 

in taxes is converted into consumer spending. These 

estimates of requirements, of course, are conservative, 

since no allowance has been made to replace losses

95 Ibid., table 3, pp. 204—205.

90 Originally it was hoped to locate back-up data on the

industrial distribution of purchases in each of several new

program areas. Such data would have made possible a superior estimate of the manpower implications, including occupational detail, through use of the interindustry transactions

approach. Planning in most of these program areas, so far as

could be ascertained, has not yet developed such data.

97 In 1966, R&D funds from all sources— public and private— were $5,460 per employee in the aircraft and missiles

industry as compared with $760 of company funds per employee in that industry. In nonmanufacturing industries, on

the other hand, the respective R&D costs per employee were

$410 and $120. National Science Foundation, Research and

Development in Industry, 1966 (NSF 68—20), table 56, p.

70.

98 Case studies of the labor market experiences of defense

workers have been conducted under the sponsorship of the

U.S. Arms Control and Disarmament Agency in the aircraft

and missile industries. The findings of these studies have been

summarized and subjected to intensive analysis in USACDA,

Reemployment Experiences of Defense Workers, A C D A /F -

113 (December 1968).

resulting from occupational mobility, retirement, and 

death during the post-Viet Nam transition.

The arithmetic of this exercise is as follows:

Total Employment Employed

expenditure Cost per change in

(In billion scientist (In Federal

Program dollars) or engineer thousands) Government

Health, labor

and welfare .___ 15.1 141.8 106.5 18.3

Science and

space research 1.0 72.0 13.9 2.3

Natural resource

Development 1.4 175.0 8.0 7.2

Transportation ........ 1.0 208.3 4.8 4.4

Surplus or tax

reduction 3.5 227.3 -15.4 -5.1

All programs 22.0 - 117.8 27,1

Deduct:

Defense

Viet Nam 22.0 276.0 78.9 23.2

Net increase in Federal program

Requirements .. —- -—- 38.9 3.9

Various objections can be raised against the results 

of such an exercise. Most of the objections, however, 

relate to data gaps rather than to the logic involved, 

at least in the context of this study. For example, the 

wide difference in expenditure per scientist and engineer between the defense program and other programs 

implies that the latter generally are more laborintensive. Although independent sources of data support this implication,97 no source, of course, actually 

provides observed expenditure and related employment data on a Federal program basis. Objection also 

can be made against the implicit assumption that the 

manpower resources used in defense programs are 

transferable to other types of programs. Differences 

in the occupational and functional composition of 

various programs, however, cannot be accepted a 

priori as barriers to the mobility of scientists and 

engineers. An information system which also provides 

for measurement and appraisal of the sources of 

supply of such manpower, by occupation, industry 

and type of Federal program is clearly indicated.

E f f e c t o f ch a n g e s in p r o g r a m e x p e n d itu r e . Changes 

in levels of support in particular programs may have 

significant economic and manpower implications, 

especially if reductions take place. Although several 

studies indicate that professional and technical 

workers generally fare better than other occupational 

groups in finding new jobs and maintaining pre-layoff 

wage and earning levels, in addition to the social 

costs, mass layoffs as the result of program changes 

can still result in considerable personal and family 

hardship.98 In general, although work force characteristics play some part in the adjustment process, the 

more important factors affecting the effect of layoffs 

are controlable and permit advance planning to mini34

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 25. Estimated employment of scientists and engineers per billion dollars of expenditures in defense programs, private industry, and Federal Government, 1965 

or 1966

Occupation

Total

defense

Private1

Industry

Federal

Government2

All scientists and engineers............... 3,370 2,230 1,140

Engineers, technical........................................... 2850 1980 870

Engineers, aeronautical................................... 520 460 60

Engineers, chemical........................................... 70 50 20

Engineers, civil.................................................... 260 100 160

Engineers, electrical.......................................... 750 510 240

Engineers, industrial.......................................... 260 230 30

Engineers, mechanical...................................... 510 370 140

Engineers, other.................................................. 480 260 220

Natural scientists................................... 520 250 270

Chemists................................................................ 130 80 50

Agricultural scientists....................................... 10 3 3

Biological scientists............................................ 30 10 20

Geologists and geophysicists.......................... 30 20 10

Mathematicians................................................... 110 60 50

Physicists............................................................... 130 50 80

Other natural scientists.................................... 80 30 50

1 Department of Defense only; 1965.

2 Department of Defense and Federal Government scientists and engineers in

Atomic Energy Commission. Civilians only. October 1966.

3 Less than 10.

mize adverse employment and earnings effects." 

Knowledge of the levels and occupational distribution 

of the work force expected to be displaced by a program cutback would be useful in such planning.

Occupational coefficients developed along the lines 

of this study, can be used to illustrate the expected 

effect of a given reduction in defense spending on the 

employment of scientists and engineers. In that program area, however, such coefficients are available 

only for the private industry and Federal Government 

sectors, although these two sectors make up the bulk 

of defense employment in those occupations. In 

practice, reductions in spending would probably be 

governed by technical as well as political priorities. 

Consequently, the application of a reduction in expenditure would be concentrated in particular sectors 

rather than across-the-board, as assumed here.

Table 25 estimates occupational employment per 

billion dollars for scientists and engineers employed in 

the defense program in 1965. These estimates, as indicated, exclude employment in universities and colleges, 

independent nonprofit organizations, and State and 

local governments. Military personnel working as scientists or engineers also are excluded. However, given 

the estimated expenditures per man-year and the 

defense program structure prevailing in 1965 or 1966, 

the derived coefficients for the two sectors imply displacement (or growth) of about 3,400 scientists and 

engineers for each $1 billion reduction (or increase)

99 Ibid., pp. 220-221.

100 In part, this is because the estimates of employment in

the private sector include indirect as well as direct employment.

No account has been taken of indirect employment generated

by the government sector per se, although it probably would

be quite small.

in defense spending. The two sectors would be affected 

differently by changes in expenditure. The incidence 

of a general reduction would fall much more heavily 

on scientists and engineers employed in private industry 

than on employees of the Federal Government,100 

although not in each occupation.

Whether or not reductions in defense spending 

result in serious unemployment and other hardships, 

of course, depends on a number of factors. The magnitude of the reduction in spending, the rate of growth 

of employment in other programs or economic sectors, 

the rate of increase in the supply of the affected occupations, and the general state of the scientist-engineer 

labor market are among the more important factors 

to be considered in efforts to plan for such contingencies. This study, however, is limited to crude estimates 

of a few variables, mainly the trends in employment 

in the occupations and the corresponding occupational 

employment coefficients in table 25. By dividing the 

estimated average annual growth for the period 1950 

to 1966 by the per-billion-dollar employment in each 

of several occupations, the size of a reduction in 

defense spending that could adversely affect employment and earnings opportunities can be inferred.

The results of such computations show that a reduction in the defense budget of approximately one 

quarter of its size in fiscal 1966 would slow the growth 

of scientist and engineering employment to nearly zero. 

For engineers alone, a $20 billion reduction would 

tend to freeze employment. In contrast, among chemists, the reduction would have to be nearly $50 billion 

to produce a similar result: for mathematicians the 

equivalent figure would be a little more than $40 

billion.

Evaluation recommendations

G e n e r a l c o n c lu sio n s. The results of the exercises in 

estimation of the effect of Federal spending on the 

employment of scientists and engineers may be summarized in five broad conclusions and some recommendations.

The conclusions are:

1. A limited capability exists for measuring the 

employment effects of Federal programs in the field 

of scientific and engineering manpower. Given certain 

assumptions about the relationships between expenditures and employment, it was found possible to achieve 

plausible estimates of the employment magnitudes for 

the larger economic sectors, along functional lines and, 

to a probably lesser degree of accuracy, in terms of 

broad program categories. Estimation within program 

categories in terms of occupational specialization was 

least successful. In general, as the level of detail 

desired increases in any of the dimensions, the capability of the data sources for measurement of manpower 

tends to diminish.

35

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Table 26. Estimated percent of scientists and engineers on Federal work, by selected sources of estimates

Sector

Unit-cost

estimate(a) Input-output(d) BLS-STP(c) C ensus-NSF(b)

National

Engineers

Register(e)

National

Scientists

Register(f)

N SF-IHE

Survey(g)

All functions and performers................................ 28 30 ( ' ) (>> 242.0 46.3 < ‘)

Non-R&D...................................................................... 12 ( ‘) (> ) ( ' ) ( ‘) 35.4 ( ‘)

R & D ............................................................................. 49 ( ' ) ( ‘) ( ‘) < l) 57.9

Industry........................................................................ 44 ( ' ) 45.6 44.0 C ) —

Federal Government................................................. 100 ( ‘) — — — — —

Colleges and universities........................................ 72 ( ' ) ( ‘) C ) ( ‘) *76.6

1 Adjusted for not employed and no report.

2 1964.

3 1 9 6 4 -6 5 .

SOURCES: (a) Tables 11-4: (b) tables 11-4, 111—1; (c) U.S. Department of Labor, Bureau of Labor Statistics. Survey of Scientific and Technical Personnel,

1966; (d) National Science Foundation, Research and Development in Industry, 1966; (e) Engineers Joint Council, Engineering Manpower in Profile, 1964; (f)

National Science Foundation, American Science Manpower, 1966; (g) National Science Foundation, Reviews of Data on Science Resources, (August 1966).

2. The foregoing conclusion is closely related to 

the general problem of measuring manpower requirements. Although measurement of Federal effect adds 

another—and extremely important—dimension, the 

basic problem is the measurement of the demand for 

scientists and engineers.

Until concepts and techniques of measurement of 

demand are further developed, the overall capability 

of the science manpower information system will 

remain weak.101 Measures of demand or requirements 

for manpower must be directly related to measures of 

output such as total employment or the output of 

goods and services. In this study such a relationship 

could be established with reasonable certainty only for 

two broad aggregates of Federal program activity and 

expenditure, and then only for one economic sector. 

Estimates for other sectors at a gross level were made 

by assumptions that are plausible but not verifiable.

3. Data problems in estimating the effect of Federal spending on employment in science and engineering were encountered mainly in the measurement of 

output or expenditure. These problems, however, were 

encountered not because of a paucity of financial and 

expenditure data in most of the important sectors, but 

because of the absence of information on man-year 

expenditures specific to occupational groups, fields of 

science or engineering, and character of work. Indeed, 

rather than paucity, under present conditions there is 

an effective “loss” of manpower information in the 

process of estimating the effect of Federal spending on 

employment. Expenditures per man-year related both 

to funding sources and to some dimensions of employment and utilization of scientists and engineers were 

most adequate in the private industry and indepen101 A Study of Scientific and Technical Manpower, Committee on Science and Astronautics, U.S. House of Representative, 86th Cong. 2d Sess., January 4, 1960, p. 33.

102 Joint Economic Committee, Subcommittee on Economic

Statistics, The Coordination and Integration of Government

Statistical Programs (90th Cong. 1st Sess., 1967), pp. 1-2.

A similar conclusion and recommendation was reached by the

Killian Committee. National Academy of Sciences. Committee

on Utilization of Scientific and Engineering Manpower, op.

cit., p. 14.

dent nonprofit organization sectors, less so or not at all 

in the university and college and government sectors, 

including the Federal Government.

Employment data, on the other hand, were reasonably adequate for most sectors, although the degree of 

detail varies among the sectors. Occupational employment measures are satisfactory in the Federal Government and private industry sectors, but only the latter 

sector relates the functional and occupational dimensions. A functional breakdown of employment of scientists and engineers in the Federal Government, 

expected to be available in the near future, should 

augment capability to measure that dimension. Occupational and functional measures of employment in 

the State and local government sector are virtually 

lacking. Scientists and engineers in the military services constitute an informational void.

4. For most practical purposes, measurement of 

the Federal employment effect is also inhibited by several conceptual problems. The most significant of these 

is the lack of a systematic, rationalized and operationally feasible conceptual framework for relating the 

physical services of Federal programs to measures of 

employment. The inability to penetrate this problem 

is a major failing of this study, although the general 

direction of a solution has been indicated.

To only a slightly lesser degree, the lack of coordination and integration of statistics on manpower and 

related analytical data is a conceptual problem in need 

of solution. The difficulties encountered in interrelating various sources of data, including manpower data 

purported to measure the same population of scientists 

and engineers, underscores a major conclusion of the 

Joint Economic Committee’s Subcommittee on Economic Statistics.

. . . further significant improvements in our statistical

services depend upon a higher degree of integration and

coordination of our statistical programs. Indeed, there

are strong indications that this is the aspect of the statistical system where progress is needed most. . . .

Nothing less than the quality of our public and private

economic policies is at stake.102

The virtual absence for most sectors of information 

about man-year expenditures and output of scientists

36

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
and engineers engaged in non-R&D functions is still 

another conceptual weakness of the science manpower 

information system. Although our estimates indicate 

that the overall Federal impact among such scientists 

and engineers is relatively minor, in the aggregate they 

constitute more than 60 percent of total science and 

engineering employment. A significant shift in the 

structure of Federal programs would mean the need 

for more information about this group of scientists and 

engineers.

5. Given the present state of information on the 

employment of scientists and engineers, the preference 

for one or the other of the estimating approaches used 

in this study cannot be easily made. Either the budget 

or method of estimation or the interindustry transactions approach gives results that appear reasonable, 

although to cover all major dimensions of scientist and 

engineer employment in this study both approaches 

were necessary. In addition, as table 26 shows, the estimates of federally supported employment derived by 

these approaches match comparable estimates based 

on direct surveys in two of the larger sectors—industry 

and universities and colleges.103 In part, this consistency is attributable to the common control totals,104 

although the effect of this factor on the estimates 

cannot be measured. The budget approach at present 

provides more insight into the sectoral and functional 

dimensions of the Federal employment impact, but is 

weak on the occupational and program dimensions. 

The interindustry transactions approach, in contrast, 

is somewhat stronger in these two respects, although 

the estimates of occupational employment diverge— 

substantially in some cases— from those provided in 

the time-series data for 1965. An explanation of the 

probable sources of these discrepancies is given in 

appendix D.

Under more ideal data conditions, the choice between the approaches would depend on the purposes of 

an analysis of Federal employment impact. Assuming a 

continuing flow of current manpower and related 

financial data, the budget-type approach would appear 

to be somewhat better suited to the analysis of shortterm problems generated by changes in the levels of 

Federal program support. For the projection of manpower requirements in Federal programs, or for planning new initiatives and undertakings, the interindustry 

transactions approach seems more useful. With this 

approach better account can be taken of general economic trends that may affect future programs, such 

as the rate of technological change; indirect as well as 

direct manpower requirements can be estimated; and 

occupational employment patterns are readily available and adaptable to any given program “mix.”

Recommendations for changes

1. The general strategy for improving the capability of the science manpower information system for 

measuring Federal employment impact should be based 

on the existing data sources and subsystems. No problems encountered in this study seems to compel consideration of an entirely new system of data on the 

employment of scientific and technical manpower. In 

addition, the various surveys and subsystems of employment and financial data already serve a variety of 

important interests and specialized groups of clientele. 

It is doubtful that a single, integrated system could 

meet all needs concurrently, including measurement 

and analysis of manpower requirements in Federal 

programs.

2. Substantial improvements can be made in the 

existing system, which will make measurement and 

analysis of Federal program requirements practically 

feasible. In general, much can be achieved by further 

integration and coordination of the relevant financial 

and employment systems. Careful attention should be 

given to the following:

a. A scheme of classification of fields of science 

and engineering common to all sectors and including 

both financial and employment data. It should be possible, for example, to bridge expenditure data reported 

in F e d e r a l F u n d s with employment and expenditure 

data in the various sectoral surveys of employment of 

scientific and technical personnel. Detailed occupational employment data should be collected in all 

sectors, but within a common conceptual framework of 

broader field-of-science groupings.

b. A common concept of reporting units for surveys 

of employment and expenditure in the private industry 

and business sectors. Although statistical arguments 

can be marshalled to support the company or enterprise concept used in studies conducted by the Bureau 

of the Census, technological and industrial developments strongly indicate that the establishment unit 

used by BLS may be analytically more rewarding.

c. Data collection centered on a common reference 

date. Employment and related data gathered by sectoral surveys should uniformly be related to the midpoint of the Federal fiscal year, that is, December or

103 Note should be taken of the fact that the engineers’

register and the scientists’ register cover only their respective

populations, while our estimates and the scientific, professional, and technical survey figures are composites of scientists

and engineers. Using the input-output estimates for private

industry and Federal Government data, estimates for scientists

and for engineers are separately available. For those two

subjects combined, federally supported employment of engineers is estimated at 24 percent : for scientists, the estimate is

27 percent.

104 Both the Survey of Scientific and Technical Personnel

in Industry and employment inverse generated from the

input-output tables used total employment by industry as

controls and/or data sources. Estimates of total employment

are comparable to those collected in the establishment survey

reported in E m p lo y m e n t a nd E a rn in g s (BLS Bulletin 1312—

6).

37

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
January. Although a few industries are subject to 

strong seasonal patterns of activity, and others such as 

colleges and universities function on other than a 

calendar-year basis, so far as scientific and technical 

manpower is concerned the results would be little 

affected by a common date of survey or reference.

3. To further the recommendations in (2) above, 

serious consideration should be given to consolidation 

of some statistical programs in the field of science and 

technology. Specifically, the following possibilities 

should be considered and carefully evaluated:

a. Merger in one program of the Survey of Scientific and Technical Personnel, now conducted by the 

Bureau of Labor Statistics and the Survey of Industrial 

Research and Development, now conducted by the 

Bureau of the Census. These two programs cover virtually the same population in the largest sector of 

federally supported employment of scientific and technical manpower. The principal barrier to consolidation appears to be that occupational employment data 

are better collected at the establishment level, and 

financial and cost data are usually a central headquarters responsibility. No substantial reason, however, 

would bar collection of estimates of expenditures per 

man-year at the establishment level. Differentiation of 

these expenditures by function and field of science, as 

well as by source of support as indicated below, would 

help to develop useful employment estimators for various types of Federal programs.

b. The Economic Information System, which now 

covers a selected group of defense contractors, should 

be terminated. This program, at least on the employment side, duplicates in part the coverage of the STP 

program. Its main function appears to be to provide 

information on the regional distribution of defense 

contract employment, but in other important respects 

—occupation, character of work, employment costs, 

and especially, Federal support of employment— EIS 

either provides no information or employment estimates which may contain a substantial bias. The 

regional distribution of employment in defense and 

other Federal programs can easily be ascertained from 

the establishment-based STP data.

4. Further improvements in the data base can be 

made by efforts to fill gaps and lacunae in the present 

system. Among those to which early consideration 

should be given are:

a. Occupational and related employment characteristics of engineers. At present, detailed occupational 

specialization in the engineering profession is available 

only from the decennial census and from the records 

of the Federal Civil Service. It is recognized that definitions of engineering occupations may be more difficult than definition of the various scientific specialties, 

although the latter are also not free of ambiguity. The 

problem, however, is more a matter of the level of 

education or training than a question of job content

and the nature of the services provided. Special studies 

in selected industries may help to resolve the difficulties in surveying engineering employment on an establishment basis.

b. Increased attention should be given to establishing appropriate definitions and concepts for measuring 

employment and requirements in the social and behavioral sciences. These occupations were excluded from 

consideration in this study, and financial and expenditure data were adjusted (accordingly) to maintain 

consistency with the current BLS-NSF definition of 

scientists and engineers. Continued omission of the 

social and behavioral sciences, however, may not be 

warranted. Political and social developments indicate 

that Federal and private activity will increasingly 

develop toward greater utilization of those professions.

c. Classification and measurement of personnel 

serving in the Armed Forces as scientists and engineers 

should be explored. Scientists and engineers in uniform 

may constitute an additional 4 to 5 percent of federally 

supported employment of scientists and engineers, but 

they are not accounted for in either the estimates of 

total or Federal science and engineering employment. 

An effort to measure such personnel in this study failed 

mainly because the Department of Defense lacks an 

information system adequate for measuring employment and utilization of uniformed scientists and engineers. Differences in the classification schemes among 

the four service branches appear to be a major obstacle.

5. This study’s greatest obstacle and most conspicuous failure proved to be the development of employment estimates in a detailed program framework. A 

solution to this problem will depend, first, on the development of a conceptual framework and corresponding 

measures of program activity or output. This part of 

the problem will necessarily have to be solved cooperatively between the operating agencies, the Bureau of 

the Budget, and the agencies responsible for the collection and analysis of data on scientific and technical 

manpower. Once such a framework becomes available, 

the second part of the problem will be to establish a 

means of collecting and analyzing data on federally 

supported employment of scientists and engineers.

It is proposed that benchmark employment and 

related financial and output data in major Federal 

programs be collected by periodic surveys. The collection of such data should be the direct responsibility of 

the dominant agencies in each of the designated program fields, for examples, the Department of Defense, 

the Department of Health, Education, and Welfare 

and so on. However, the surveys should be under the 

general guidance and direction of the National Science 

Foundation to ensure uniformity of manpower, fieldof-science, occupational and functional concepts as 

well as sectoral coverage and survey dates. Should such 

benchmark surveys be developed and established on a 

coordinated basis with the present sample surveys,

38

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
further elaboration of the details of Federal support 

would not appear to be necessary. Indeed, under such 

ciicumstances, a case might be made for eliminating 

this issue from employment surveys now on an annual 

or biennial cycle, such as the STP. Experience in the 

general behavior of occupational employment relationships indicates that a survey cycle of 3, or even 5, 

years may be sufficient to meet most of the needs of the 

Government for such data.

6. Further experimentation should be made with 

the interindustry transactions approach to investigate 

the manpower implications of various Federal programs, especially in areas of proposed Federal activity. 

The major effort needed here will be to estimate billsof-goods for each such program. Additional study also 

may be needed to evaluate the validity of the occupational patterns.

7. For manpower planning in the fields of science 

and engineering, there is a need for reliable estimates 

of total requirements. In addition to changes in the

requirements generated by Federal programs, occupational coefficients reflecting changes resulting from replacement needs— retirement, out-mobility, and death 

—should also be developed.

8. Although not an objective of this study, for the 

purposes of measuring Federal employment effect, 

work on various aspects of the behavior of the 

labor market for scientists and engineers should be 

encouraged. Among the topics in need of further investigation and analysis are the industrial, occupational 

and functional mobility of such workers; the sources 

of supply of labor to the scientific and engineering 

occupations; the effects of earnings on changes in the 

supply and demand for scientific and technical manpower ; and the relationship between training and education and the utilization of scientists and engineers. 

Such studies would not only be valuable in understanding the labor market, but essential for analysis 

and interpretation of data on federally supported 

employment in this field.

39

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Appendix A. A Note on Program Planning and Manpower Requirements

This study investigates the degree to which manpower requirements were being 

estimated as part of the Planning-Programming-Budgeting System in various Federal 

Government agencies. The investigation was neither exhaustive nor systematic; 

approached were only a few agencies to which the researcher was directed because 

these agencies were thought to have made some progress toward projecting manpower requirements as an integral part of the PPBS exercise.1

PPBS is an effort to achieve efficiency in the allocation of resources in government 

programs.2 Its proponents visualize its concepts and techniques as substitutes in the 

public sector for the price and profit indicators used in investment decisions (or 

long-term planning) in the private, market-oriented sector. Charles Schultze has 

described PPBS as an effort to replace the practice of incremental budgeting or planning with a scheme that reviews and evaluates the costs and benefits of government 

programs as a whole.3 PPBS was established on a Government-wide basis by a Presidential directive in August 1965. Manpower requirements and costs are among the 

more important elements to be evaluated under the system.

Our investigation of the manpower aspect of PPBS may be briefly summarized in 

the following conclusions:

1. Manpower planning as an integral component of PPBS has made relatively 

little progress in the agencies surveyed, although there is general interest in the 

development of this component.

2. Assessment and costing of future manpower requirements in most Federal 

agencies is limited to intramural employment. A number of agencies, for example, 

the Bureau of Mines, concern themselves principally with manpower planning as 

an internal management or personnel administration tool. Agencies which have 

made more inclusive projections of professional and technical manpower requirements in their areas of responsibility vary with respect to the integration of projected 

requirements into their PPBS programs. Mostly, these agencies have education and 

training of scientific and technical manpower as a substantial responsibility—for 

example, AEC, NASA, the National Institutes of Health, and the Department of 

Agriculture. Only a few, notably AEC, have attempted to include projected manpower requirements in their PPBS memorandums.

3. Lack of an adequate information system on manpower inputs, especially in 

the extramural sectors, may be a significant barrier to progress in Federal manpower 

planning under PPBS.

4. Another imporatnt limiting factor is a shortage of personnel in the Federal 

Government with skill and experience to develop the operating concepts and 

manpower information systems required for PPBS.

1 Among the agencies visited or contacted by telephone were the Department of Agriculture, the Department of Defense, the Department of the Interior, the Department of Labor,

the Department of Health, Education, and Welfare, the Federal Aviation Administration, the

National Aeronautics and Space Administration, the Atomic Energy Commission, and the

Bureau of the Budget. Discussion in each case was quite general and open-ended, although

several agencies generously provided documents relating to their manpower information systems.

2 There is a growing literature on PPBS. In addition to the Government’s own studies (see,

for example, Budget of the United States, Special Analysis, Fiscal Year 1970, Pt. 4, pp. 253-

273), there are several good introductory explanations of objectives and techniques. See David

Novick, ed., Program Budgeting, (Rand Corporation, Santa Monica, California, 1965);

Charles L. Schultze, The Politics and Economics of Public Spending (Washington, D.C., The

Brookings Institution, 1968), especially chapter 2, pp. 19-34; and Edward Sussna, “Planning, Programming, and Budgeting Systems— A New Approach to Government Spending,”

Pittsburgh Business Review, May 1968.

3 Schultzer, op. cit., p. 23.

41

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Appendix B. Estimated total employment and employment attributable to Federal purchases of goods and services,

by source of procurement and industry,1 1965

[In thousands]

Industry titles Total

employment

Total

Federally supporter

Department

of

Defense

All other

Federal

Government

All industries................................................................................................................................................................ 62,325.4 3,220.4 2,079.2 1,141.3

Livestock and livestock products........................................................................................................................................ 1,936.1 17.6 8.3 9.3

Other agricultural products................................................................................................................................................... 2,395.2 41.1 14.1 27.0

Forestry and fishery products.............................................................................................................................................. 109.1 12.7 1.9 10.8

Agricultural, forestry and fishery services....................................................................................................................... 220.3 9.9 1.6 8.4

Iron and ferroallory ores mining......................................................................................................................................... 293.5 2.4 1.5 0.9

Nonferrous metal ores mining............................................................................................................................................ 56.5 13.2 4.1 9.2

147.6 7.8 4 3 3 5

Crude petroleum and natural gas....................................................................................................................................... 307.2 20.0 15.8 4.2

Stone and clay mining and quarrying............................................................................................................................. 988.2 5.4 2.6 2.8

Chemical and fertilizer mineral mining............................................................................................................................. 17.8 1.2 0.6 0.6

New construction...................................................................................................................................................................... 2,556.4 118.7 35.1 83.6

Maintenance and repair construction................................................................................................................................ 1,114.0 103.0 53.7 49.3

Ordnance and accessories.................................................................................................................................................... 225.9 185.6 101.7 83.8

Food and kindred products................................................................................................................................................... 1,795.1 18.1 6.7 11.5

Tobacco manufactures............................................................................................................................................................ 87.0 0.6 0.4 0.2

Broad and narrow fabrics, yarn and thread m ills......................................................................................................... 603.5 14.9 11.8 3.2

115 4 3 4 2 3 1 1

1 541.7 10 9 5 6 5 3

Miscellaneous fabricated textile products........................................................................................................................ 162.5 6.7 4.1 2.6

622 2 32 3 17 2 15 2

Wooden containers................................................................................................................................................................... 37.5 2.5 1.4 1.0

Household furniture................................................................................................................................................................. 332.5 11.8 8.5 3.3

Other furniture and fixtures.................................................................................................................................................. 133.6 5.6 1.7 3.9

Paper and allied products, except containers................................................................................................................. 435.0 15.7 11.8 3.9

Paperboard containers and boxes....................................................................................................................................... 198.8 15.8 6.0 9.8

Printing and publishing.......................................................................................................................................................... 1,046.1 33.7 29.5 4.1

Chemicals and selected chemical products..................................................................................................................... 407.3 36.9 15.7 21.2

Plastics and synthetic m aterials.......................................................................................................................................... 194.8 23.1 6.6 16.5

Drugs, cleaning, and toilet preparations.......................................................................................................................... 225.5 8.8 3.2 5.6

Paints and allied products..................................................................................................................................................... 64.9 8.6 3.0 5.6

Petroleum refining and related products.......................................................................................................................... 182.6 12.2 10.2 2.0

Rubber and miscellaneous plastics products.................................................................................................................. 469.6 21.0 18.7 2.3

Leather tanning and industrial leather products........................................................................................................... 35.8 13.1 5.4 7.7

Footwear and other leather products................................................................................................................................ 327.7 4.0 3.8 0.1

Glass and glass products....................................................................................................................................................... 170.3 7.5 6.6 1.0

Stone and clay products......................................................................................................................................................... 440.2 17.5 14.1 3.4

Primary iron and steel manufacturing.............................................................................................................................. 917.8 65.5 51.6 13.9

Primary nonferrous metals manufacturing...................................................................................................................... 357.6 60.9 33.7 27.2

Metal containers....................................................................................................................................................................... 70.6 16.4 1.0 15.4

Heating, plumbing and structural metal products........................................................................................................ 432.7 11.7 10.9 0.7

Stampings screw machine products and bolts............................................................................................................... 318.8 45.9 24.1 21.8

Other fabricated metal products......................................................................................................................................... 418.7 33.6 20.1 13.5

Engines and turbines............................................................................................................................................................ 90.3 20.8 7.7 13.1

Farm machinery and equipment......................................................................................................................................... 138.6 4.8 1.8 3.0

Construction, mining and oil field machinery................................................................................................................. 174.8 4.2 4.0 0.3

Materials handling machinery and equipm ent............................................................................................................. 76.2 5.0 3.0 2.0

Metalworking machinery and equipm ent........................................................................................................................ 316.1 25.5 24.2 1.3

Special industry machinery and equipm ent.................................................................................................................... 195.6 12.6 3.1 9.5

General industrial machinery and equipment................................................................................................................. 252.1 17.4 15.9 1.5

Machine shop products........................................................................................................................................................... 209.7 37.7 33.0 4.8

42

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Appendix B. Estimated total employment and employment attributable to Federal purchases of goods and services,

by source of procurement and industry,1 1965— Continued

[In thousands]

Industry titles Total

employment

Total

;ederally supporter

Department

of

Defense

All other

Federal

Government

Office, computing and accounting machines............................................................................................................... 190.1 20.0 14.2 5.8

Service industry machines.................................................................................................................................................. 111.7 5.1 3.2 1.9

Electric industrial equipment and apparatus............................................................................................................... 355.4 42.9 30.8 12.1

Household appliances 159.1 4.0 2.6 1.4

Electric lighting and wiring equipm ent.......................................................................................................................... 169.5 15.5 9.7 5.8

Radio, television and communication equipm ent.......................................................................................................... 549.3 226.5 181.0 45.5

Electronics components and accessories....................................................................................................................... 306.1 98.7 71.2 27.5

Miscellaneous electrical machinery and supplies........................................................................................................ 100.4 8.8 6.1 2.7

Motor vehicles and equipm ent.......................................................................................................................................... 842.9 18.2 13.5 4.7

Aircraft and parts.................................................................................................................................................................... 624.2 446.9 373.0 73.9

Other transportation equipm ent....................................................................................................................................... 268.5 48.2 45.4 2.7

Scientific and controlling instrum ents............................................................................................................................ 258.9 43.9 27.1 16.8

Optical, ophthalmic and photographic equipm ent........................................................................................................ 128.0 14.3 12.8 1.5

Miscellaneous manufacturing.............................................................................................................................................. 451.8 12.3 6.7 5.6

Transportation and warehousing...................................................................................................................................... 2,695.1 183.5 145.8 37.6

Communications: except broadcasting......................................................................................................................... 771.5 41.5 24.5 17.1

Radio and television broadcasting..................................................................................................................................... 108.1 6.1 3.4 2.7

Electric, gas, water and sanitary services....................................................................................................................... 633.0 32.8 18.9 13.9

Wholesale and retail trade.................................................................................................................................................. 15,224.0 202.6 120.2 82.4

Finance and insurance......................................................................................................................................................... 2,582.6 50.0 31.3 18.7

Real estate and rental............................................................................................................................................................. 767.0 12.8 8.1 4.7

Hotels; personal and repair services, except auto........................................................................................................ 2,747.6 82.2 36.5 45.7

Business services..................................................................................................................................................................... 2,161.6 122.7 70.5 52.2

Research and development................................................................................................................................................... 101.7 52.5 38.7 13.7

Automobile repair and services.......................................................................................................................................... 493.3 13.5 6.3 7.2

Amusements.............................................................................................................................................................................. 706.0 13.5 8.7 4.8

Medical, educational and nonprofit organizations........................................................................................................ 4,851.0 176.1 95.3 80.8

1 SIC equivalents of industry groups defined in Bureau of Labor Statistics, Projections 1970, Bulletin 1536 (Washington, D .C ., 1966) table IV—1 p. 58.

43

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Appendix C. Estimated federally supported extramural employment of scientists and engineers by State and local

governments, selected occupations, 1965

Occupation Total employment Federally supported

Percent

federally supported

All scientists and engineers..................................................................................................................... 70,795 7,653 10.8

Engineers, technical................................................................................................................................................. 59,754 6,147 10.3

Aeronautical....................................................................................................................................................... 627 94 15.0

Chemical............................................................................................................................................................. 2,633 357 13.6

C iv il...................................................................................................................................................................... 22,618 1,476 6.5

Electrical........................................................................................................................................................... 8,766 999 11.4

Industrial............................................................................................................................................................ 4,955 594 12.0

M echanical......................................................................................................................................................... 9,155 1,048 11.4

Metallurgical...................................................................................................................................................... 1,612 228 14.1

862 232 26.9

8,849 1,167 13.2

Natural scientists...................................................................................................................................................... 11,041 1,506 13.6

Chemists............................................................................................................................................................. 5,011 561 11.2

Agricultural scientists..................................................................................................................................... 1,127 98 8.7

Biological scientists......................................................................................................................................... 827 76 9.2

Geologists and geophysicists........................................................................................................................ 1,163 208 17.9

Mathematicians................................................................................................................................................. 1,221 155 12.7

Physicists............................................................................................................................................................ 1,001 129 12.9

Other natural scientists.................................................................................................................................. 588 52 8.8

44

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Appendix D . Discrepancies between time series employment estimates 

and occupational m atrix estimates

Discrepancies are noted between estimates of occupational employment in private

industry published in E m ploym ent of Scientists and Engineers in the United States,

National Science Foundation, NSF 68—30 and those reported in the BLS occupational matrix used in chapter IV of this study. These discrepancies are shown in the

following table:

Interindustry

Occupation Matrix

Time

Series Difference

Engineers ........................................................... ............... 863,657 785,800 77,857

Natural scientists__ ___ _________ __________ ............... 224,743 175,300 49,443

Chemists ..................................................... ............... 92,927 83,900 9,027

Agricultural scientists ........................... ............... 22,038 6,100 15,938

Biological scientists ................................. ............... 23,394 9,400 13,994

Geologists and geophysicists ................. ............... 19,405 13,400 6,065

Mathematicians ............................. ........... ............... 25,708 26,500 -792

Physicists ..................................................... ............... 22,387 15,300 7,087

Other natural scientists........................... ......... . 17,264 20,200 -2,930

The discrepancies may occur for a variety of technical reasons, primarily differences in industry and worker classification schemes used in the two studies.

Differences may also be due to the different survey methods. Time Series data are

based on employer enumeration; occupational matrix data was developed from

the U.S. Census of Population which is based on individual employer enumeration.

In the Time Series, all government employees are enumerated under the government sector. In the matrix concept, government employees, except those in public

administration functions, are classified in the appropriate industry category for

activities commonly carried on also by the private sector. These differences can be

better illustrated perhaps by using agricultural scientists as an example.

About 6,100 agricultural scientists were employed in private industry in 1965

according to the Time Series (STP). The occupational matrix shows 22,038 agricultural scientists, a difference of almost 16,000 (15,938). Over one-half of all

agricultural scientists shown in the matrix are in the agriculture, forestry, and fisheries sector of the economy. Most are in the forest products industry. Under the

matrix concept, the agriculture, forestry and fisheries sector included over 36,000

government workers in 1960. Some of these workers are agricultural scientists. In

the matrix, foresters and conservationists are included in the totals for agricultural

scientists. Therefore, some Federal “agricultural” scientists show up as being employed in the agricultural, forestry, and fisheries sector under the matrix concept.

In the Time Series, on the other hand, all Federal Government workers are included

in the Federal Government sector. In 1965, about 15,500 agricultural scientists were

employed by the Federal Government. State and local governments employed an

additional 5,600 agricultural scientists.

45

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Appendix E. Estimated scientists and engineers employed in the Federal Government selected occupations, by Program

October, 1966

Occupation All

programs

National

Defense1

International

affairs Space Agriculture

Natural

resources

Commerce2

and

transport

Housing

and

development

Health

Education

and Welfare

Veterans

affairs

Other

programs

Total Scientists and Engineers 131,087 61,492 3,097 13,646 15,605 16,097 9,098 554 5,803 1,527 4,168

Engineers, Technical................................. 76,832 47,024 759 8,877 2,403 7,745 4,890 549 1,457 506 2,622

8,898 3,076 5,478 324 20

l'358 853 14 9 67 349 15 44 7

Engineers, civ il................................... 181606 8,942 395 62 1,522 3,686 2,247 292 946 104 410

Engineers, electrical......................... 18,323 13,101 75 1,110 181 1,472 1,572 6 111 24 671

Engineers, industrial........................ 2,089 1,860 9 22 19 42 25 1 2 13 96

Engineers, mechanical..................... 8,796 7,424 15 186 62 357 132 20 78 34 488

811 510 226 1 53 11 2 1 7

434 52 4 16 303 1 58

Engineers, other .” ............................. 17,517 11,206 247 1,784 535 1,483 564 230 273 330 865

Natural Scientists...................................... 54,255 14,468 2,338 4,769 13,202 8,352 4,208 5 4,346 1,021 1,546

8 135 2 685 156 119 939 1 027 351 1,956 624 278

14739 '214 1 767 2 10 005 2 562 1 1 153 34

6933 932 336 76 l|851 2 203 19 1,176 326 14

2638 738 28 132 1311 236 128 65

Mathem aticians. ' ............................. 4J09 2,708 8 643 48 146 340 4 164 10 38

Physicists............................................. 5 763 4 228 6 381 38 201 745 83 48 33

Other natural scientists................... li;9 3 8 2^963 37 3,548 189 902 2,516 686 13 1,084

' Excludes Selective Service.

2 Commerce and FAA.

1 M aterials engineering.

Source: National Science Foundation, Scientific and Technical Personnel in

the Federal Government, 1966, NSF 6 8 -1 6 , April 1968.

f t U . s . G O V E R N M E N T P R IN T IN G O F F I C E : 1 970 O------3 8 4 .9 6 9

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis
U.S. DEPARTMENT OF LABOR

BUREAU OF LABOR STATISTICS

WASHINGTON, D.C. 20212

OFFICIAL BUSINESS

POSTAGE AND FEES PAID 

U.S. DEPARTMENT OF LABOR

THIRD CLASS MAIL

Digitized for FRASER 

http://fraser.stlouisfed.org/ 

Federal Reserve Bank of St. Louis