Introduction
The North American Industry Classification System (NAICS) and the National Occupational Classification (NOC) are data classification systems that help to define, organize, and categorize data related to economic activities.
Data Classification
Data classification is a way to define, organize, and categorize data so that it is easier to store, sort, and use in the future. Classification systems usually assign specific codes based on the level of hierarchy within the identified categories.
There are three main types of data classification: content-based classification, context-based classification, and user-based classification.
In today’s world where data is abundant and comprehensive, it’s critical that people’s privacy and identity are protected. Content-based classification aims to protect personal data by categorizing data based on degree of sensitivity. This often leads to restricted access to the data. Statistics Canada, for example, suppresses data to ensure it is not possible to identify individual survey responses. If you’re researching a geographic area with a small population size, you may find publicly available data (such as population by age) and a notice that some data is not available due to it being classified as confidential (such as a breakdown of income level by age and ethnic origin).
Labour market information follows the same kind of classification procedures that enforce privacy, but also uses context-based classification. This means that data is defined, organized, and categorized based on things like application, research topic, indicators or variables, and location. Below is a list of some examples of important Canadian classification systems:
NAPCS is a four-tier hierarchical system that classifies all products (goods and services) using a coding system. NAPCS is primarily used to collect, process, and produce data on goods and services for Statistics Canada’s economic, business, and trade statistics programs. NAPCS is consistent across Canada, the United States, and Mexico.
CIP is a three-tier hierarchical system that classifies instructional programs by field of study. CIP can also be used to classify other related units such as courses, students, graduates, and faculty by program.
Every data point from Statistics Canada is associated with a specific geographic area ranging from national, country-wide data to very small areas known as “dissemination blocks.” Statistics Canada has developed a Standard Geographic Hierarchy that identifies and explains the relationships between different levels of geography. To learn more about data and geography, check out RAnLab’s Data to Decisions: Data by Geographical Areas.
NAICS and NOC
The North American Classification System (NAICS) and the National Occupation Classification (NOC) are both used to classify labour market activity. This article focus on NAICS and NOC, so keep reading to learn more!
NAICS
The North American Classification System (NAICS) is a four-tier hierarchical system that classifies all economic activity within North America (Canada, the United States, and Mexico).
Structure
At the highest, most broad level, all economic activities are classified as operating within 1 of 20 sectors. NAICS has a four-tier hierarchical structure which means that an economic activity can be classified on four levels: sector, subsector, industry group, and industry. Following this structure, each economic activity within a sector can be further specified into a subsector. Within subsectors there are industry groups, and at the lowest level there are industries (there are 928 industries across all sectors).
Each economic activity is assigned a specific code that corresponds to the four-tiered classification system to make it easier to define, organize, and categorize labour market information. Depending on the context, the number of specified digits used will vary. The figure below provides an example of a NAICS code and how it is assigned.
Labour Market Information
NAICS data is available through the Labour Force Survey which is released monthly by Statistics Canada.
The Labour Force Survey provides data for each of the hierarchical levels. Essentially, this means that labour market information is available by sector, subsector, industry group, and industry. For example, each month within the Labour Force Survey there is data available on income by sector (2-digit codes). This is a high level breakdown of income across the 20 economic activity sectors. More specific data on the 928 industries is also available.
The Business Register also utilizes NAICS as a way to sort and organize data. The Business Register is Statistics Canada's repository for information on businesses operating in Canada. The registry can be filtered based on geography, employment size, and NAICS code and is continuously maintained.
Learn More About NAICS
Interested in finding a specific NAICS code? You can use the search function on the Statistics Canada website.
If you’re looking for more information on NAICS, Statistics Canada has a resource page that provides details on each of the hierarchical levels.
NOC
The National Occupational Classification (NOC) is a system used to classify occupations into a four digit code according to their broad occupational category and skill level (now TEER categories).
Structure
The NOC system assigns occupations to 1 of 10 categories, known as broad occupational categories. The first digit of a NOC code identifies which category the occupation belongs to. The second digit of a NOC code indicates the level of education and training typically required for the occupation, this is known as skill level. For the 2021 census, "skill level" was replaced with "training, education, experience, and responsibilities,” also known as TEER level. The structure of NOC remains the same with the first digit representing the broad occupational category and the second digit representing the level of skill, training, etc.
For example, the first digit of the NOC code “3113” tells us that this represents a health occupation. The second digit tells us that this occupation usually requires university education. The last two digits are critical as they identify characteristics that are specific to the occupation. All together, “3113” represents the dentist occupation which is classified based on things such as main duties. The figure below provides an example of a NOC code and the basic structure.
Labour Market Information
NOC data is available through the census which is released every 5 years by Statistics Canada. The most recent census data was released throughout 2022 and contains data and information collected in 2021. Employment income statistics are available by NOC 1, 2, 3, and 4 digit codes; this means that data is available for broad occupational groups and specific occupations (and other groups in between).
Learn More About NOC
Interested in finding a specific NOC code? Check out this tool developed by the Government of Canada.
If you want to learn more about NOC, The Government of Canada has a helpful tutorial.
NAICS VS. NOC
NAICS and NOC can be used together to get a comprehensive picture of the labour market from both supply and demand perspectives. The way they work is similar, however each of the classification systems work with data differently.
NAICS classifies industries which is a top-down approach that focuses on the employer. NAICS helps to understand the demand perspective of what’s required and happening within an industry.
NOC classifies occupations which is a bottom-up approach that focuses on employees. NOC helps to understand the supply perspective of what individual characteristics are present in an occupation. Together, NAICS and NOC help to complete a full picture of the labour market that includes both labour supply and demand.
Latest Updates
NAICS
NAICS 2022 Version 1.0 is a revision to NAICS that was approved on July 30, 2021. There are two types of changes: real changes and virtual changes.
Real changes affect the meaning and scope of a classification. For example, NAICS 311611 Animal Slaughtering has been replaced by three new NAICS codes: NAICS 311616 Beef Cattle Slaughtering, NAICS 311617 Hog Slaughtering, and NAICS 311619 Other Animal Slaughtering. This will make it easier to differentiate between and find specific data and information on economic activities.
Virtual changes alter coding, titles and/or definitions which have no effect on the meaning or scope of the classification. For example, NAICS 311625 Poultry Processing has been changed to NAICS 311615 Poultry Slaughtering and Processing.
Click here to see a complete list of real and virtual changes made in NAICS 2022 Version 1.0.
NOC
NOC 2021 Version 1.0 is an updated version of NOC that was approved on September 21, 2021.
TEER Categories
“Skill level” has been replaced with “Training, Education, Experience and Responsibilities (TEER) categories.” These new categories more accurately reflect the level of training, education, and experience required to gain entry into each occupation, and the responsibilities associated with it. There are six TEER categories that have replaced four skill levels.
Changes to Occupations
This new version of NOC has introduced changes to existing unit groups and the creation of new ones. For example, there is now a new NOC code for the occupation of cyber security specialists. These changes reflect the evolution of the labour market.
STEM NOC variant
The NOC update provides a new way to analyze the labour market through a science, technology, engineering, and mathematics (STEM) lens. The new STEM NOC variant divides occupation data into three categories: STEM, STEM related, and other than STEM.
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This article has been sponsored in part by the Future Skills Centre.
