Change vs Difference I have data on &quot;share in labor employed in manual occupations&quot; for two years (i.e. 1980 and 2005) and looking to create the following dependent variable:
change in the share of labor employed in manual occupation over the period 1980-2005
Which is the appropriate method based on the definition in bold above?

Share in 2005 - Share in 1980

(Share in 2005 - Share in 1980)/(Share in 1980)


My best guess: given that I am dealing with &quot;shares&quot;, method 1 would be appropriate.
1 gives you the percentage point (p.p.) difference,
2 gives you the percentage difference.
There is no rule that says that if you're dealing with shares, you have to use 1. The reason 1 is preferred is that, when the measurement unit is in percentage, things get confusing quickly (e.g. going from a 2% to a 1% interest rate is a 50 percent reduction in the interest rate, but of course only a 1 p.p. reduction).
In your case, 2 could be meaningful, though. For example, &quot;the share in labor employed in manufacturing decreased by half&quot;. A compromise could be to express the change in percentage points to avoid confusion, and then add the percentage change if it is meaningful (e.g. the labor share decreased by 20 p.p., a reduction of 50%).