Employment and real GDP[1] vary across states, and within industries across states. The fraction of a state’s employment in a specific industry is related to the fraction of a state’s real GDP generated in a specific industry, but the correlation is far from perfect. The distribution of employment across industries can diverge substantially from the distribution of real GDP across industries, revealing deeper structural characteristics of productivity, capital intensity, and value added.
In our previous blog, Expanding Health Care Led Growth and Corporate Caution in Texas Employment, we documented how employment in Texas is concentrated in sectors such as Trade, Transportation and Utilities; Health Care and Social Assistance; Professional and Business Services; Leisure and Hospitality; and Government. Together, these sectors account for a substantial share of total nonfarm employment. Manufacturing, Finance, and Mining, by contrast, employ comparatively smaller shares of the workforce.
When we turn from employment to real GDP, the ranking of industries changes materially. Using 2024 employment data from the Quarterly Census of Employment and Wages (QCEW) and real GDP by industry from the Bureau of Economic Analysis (BEA), both harmonized under (North American Industry Classification System (NAICS) classifications, we can directly compare employment shares and output shares across industries.
Figure 1: Comparison of Employment Shares and Real GDP Shares, Texas
Source: QCEW and BEA
Figure 1 presents a comparison of industry-level real GDP shares and employment shares, ranked by GDP contribution in Texas. A clear divergence emerges between the distribution of output and the distribution of jobs across sectors. Several industries generate a substantially larger share of GDP relative to their employment footprint. For example, Real Estate and Rental and Leasing accounts for 12.6% of total GDP while employing only 1.8% of workers, implying the role of property income and imputed rents in value-added calculations. Manufacturing contributes 12.4% of GDP with 7.0% of employment, and Mining, Quarrying, and Oil and Gas Extraction produces 8.8% of GDP while accounting for just 1.6% of employment. The Information sector similarly generates 5.1% of GDP with only 1.6% of the workforce.
A second group of industries exhibits a closer relationship between employment and output. Professional, Scientific, and Technical Services contribute 8.8% of GDP and represent 7.5% of employment, suggesting relatively similar proportions of labor input and value added. Finance and Insurance shows near alignment as well, with 4.9% of GDP and 4.7% of employment, while Wholesale Trade accounts for 6.5% of GDP compared to 4.7% of employment. These sectors demonstrate output levels that are broadly consistent with their workforce size, although modest differences still indicate variation in average productivity across industries.
In contrast, several sectors account for a larger share of employment than their contribution to GDP would suggest. Total Government employs 14.5% of the workforce but contributes 8.8% of GDP, reflecting how government output is measured primarily through compensation rather than market valuation. Health Care and Social Assistance represents 12.0% of employment while generating 6.0% of GDP, indicating that a large workforce is required relative to the value added recorded in national accounts. Retail Trade shows a similar pattern, with 10.1% of employment and 6.0% of GDP, and Accommodation and Food Services accounts for 9.7% of jobs but only 2.3% of GDP, marking one of the largest proportional differences in the chart. These sectors employ many workers relative to the value added attributed to them.
The remaining industries reinforce this structural pattern. Construction contributes 4.1% of GDP and 6.2% of employment, while Transportation and Warehousing accounts for 3.5% of GDP and 4.5% of employment, both displaying moderate differences between output and workforce shares. Utilities, however, generate 1.5% of GDP with just 0.5% of employment, indicating relatively high output per worker. Educational Services (0.7% GDP vs. 1.6% employment), Arts, Entertainment, and Recreation (0.6% vs. 1.2%), and Administrative and Support Services (3.3% vs. 6.4%) also exhibit employment shares exceeding their GDP shares. Overall, Figure 1 demonstrates that sectoral employment concentration does not directly translate into sectoral output concentration; rather, differences in productivity and value-added structure explain the observed gaps between employment shares and GDP shares.
The National Context And Texas
Texas represents a sizable share of the United States economy but remains a fraction of the national total. In 2024, Texas recorded 13.94 million total jobs and $2.22 trillion in real GDP, compared with 154.99 million jobs and $23.40 trillion nationally. Private industries dominate in both cases: Texas had 11.91 million private jobs generating $2.03 trillion, while the U.S. had 132.57 million private jobs producing $20.80 trillion. Government employment in Texas stood at 2.03 million with $0.20 trillion in GDP, compared to 22.42 million jobs and $2.59 trillion nationally. Overall, Texas accounts for roughly 9% of U.S. employment and about 9–10% of total U.S. GDP
Figure 2 describes the employment share and the GDP share nationally. The comparison between Texas and the United States chart reveals differences in how employment and output are distributed across industries. In both economies, Health Care and Social Assistance and Government are major employers. In Texas, Health Care accounts for 12.0% of employment and 6.0% of GDP, compared to 14.4% of employment and 7.8% of GDP nationally. Government employment is 14.5% in both Texas and the U.S., but its GDP share is smaller in Texas (8.8%) than nationally (11.0%), indicating a relatively smaller public-sector output base. Retail trade also shows a similar pattern in both regions: Texas has 10.1% employment and 6.0% GDP, close to the national 10.0% employment and 6.3% GDP.
Manufacturing contributes 12.4% of Texas GDP with 7.0% employment, compared to 10.0% GDP and 8.2% employment nationally, showing that Manufacturing plays a larger output role in Texas and appears to generate more value added per worker. The divergence is even stronger in Mining, Quarrying, and Oil and Gas Extraction, which accounts for 8.8% of Texas GDP but only 1.6% of employment, while nationally it represents just 1.5% of GDP and 0.4% of employment. Conversely, Real Estate and Rental and Leasing contributes slightly less to Texas GDP (12.6%) than nationally (13.5%) despite similar small employment shares (about 1.8% in Texas vs. 1.6% nationally). Information also shows a smaller GDP presence in Texas (5.1%) compared to the national figure (7.2%). Overall, Texas displays a more production- and energy-oriented output structure, while the national economy is relatively more concentrated in finance, information, and government output.
Figure 2: Comparison of Employment Shares and Real GDP Shares, National
The differences between Texas and the United States reflect state-level specialization and national aggregation. Texas has a stronger concentration in energy and manufacturing, which raises those sectors’ GDP shares within the state, while the national profile reflects the combined influence of all states, including those more concentrated in finance, information, or government activity. As a result, the U.S. industry composition does not mirror any single state’s profile.
The dashboard below presents a cross-sectional comparison of employment shares and real GDP shares across states. It demonstrates that industries with larger employment bases are not necessarily those generating the greatest economic output. Selecting a state on the interactive map updates the adjacent bar chart and the accompanying table below the map, providing a detailed breakdown of that state’s industrial composition. The table categorizes activity into Private Industries and Government and Government Enterprises, reporting both employment levels and real GDP contributions for each sector at the state level. Beneath this state-level detail, a static national table provides a benchmark comparison, allowing to evaluate how individual states differ from the aggregate U.S. economy in terms of workforce distribution and output levels.
The 2024 comparison of QCEW employment and BEA real GDP data demonstrates that workforce concentration does not necessarily align with output concentration. In Texas, energy production, Manufacturing, and Real Estate generate disproportionately large shares of GDP relative to their employment, while sectors such as Government, Health Care, Retail, and Accommodation employ a larger share of workers than their GDP contribution suggests. Similar patterns exist at the national level. Employment concentration and output concentration represent distinct dimensions of economic structure. Evaluating economic strength requires examining both workforce distribution and value added, as employment levels alone do not fully capture an industry’s contribution to overall economic performance.
FOOTNOTE
[1] GDP can be measured in different ways, and the income method is one of them. It adds up all the income earned from producing goods and services, including wages, profits, rent, interest, taxes, and depreciation. In simple terms, it measures how much money people and businesses earn from the country’s total production.