• Story Name: European Jobs
  • Story Topics: Economics, Europe,
  • Datafile Name: European Jobs
  • Methods: Cluster Analysis, Principal Components,
  • Abstract:

    The data are the percentage employed in different industries in Europe countries during 1979. The job categories are agriculture, mining, manufacturing, power supplies, construction, service industries, finance, social and personal services, and transport and communications. It is important to note that these data were collected during the Cold War.

    A single-linkage cluster analysis show that the countries cluster together into three main groups along political lines. Group 1 (colored in red) at the top of the first plot contains countries of the communist East Bloc. Group 2 (colored in blue) contains countries of capitalist Western Europe. Group 3 (colored in yellow) contains Yugoslavia, which was unaligned and shared some characteristics of both other groups, and Turkey, which is probably more properly classified as an Asian nation since only a small percentage of its land area lies on the European continent.

    A principal components analysis of the same data yields two main principal components (PC's) that explain 38.7% and 23.7% of the variability in the data respectively. In principal components analysis we must be careful to remember that the PC's are mathematical constructs and do not necessarily have an interpretation with respect to the observed variables. However, bearing this in mind, it is often valuable to look at the loadings of the major PC's to see our interpretations might be.

    The first PC (denoted U1 in Plot 2 below) has a high positive loading on the agriculture variable and negative or zero loadings on all other variables. This PC may be interpreted as distinguishing between countries with agricultural and industrial economies. The plot below shows that Turkey and Yugoslavia (yellow) have much values on U1 than the other countries, which seems to suggest that their economies are more agricultural than the other nations.

    The second PC (denoted U2) has negative loadings on service industries, finance, and social and personal services, but has positive loadings on all others including. This PC may be interpreted as distinguishing between nations with large and small service sectors. The capitalist Western nations (blue) have lower values on U2 than the communist Eastern nations (red), which suggests that economies in the West have larger service sectors in their economies.

  • Images:
    Jobs Cluster

    Job Plot

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