Local and National Concentration Trends in Jobs and Sales: The Role of Structural Transformation

David Autor, Christina Patterson and John van Reenen

No 31130, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: National industrial concentration in the U.S. has risen sharply since the early 1980s, but there remains dispute over whether local geographic concentration has followed a similar trend. Using near population data from the Economic Censuses, we confirm and extend existing evidence on national U.S. industrial concentration while providing novel evidence on local concentration. We document that the Herfindhahl index of local employment concentration, measured at the county-by-NAICS six-digit-industry cell level, fell between 1992 and 2017 even as local sales concentration rose. The divergence between national and local employment concentration trends is attributable to the structural transformation of U.S. economic activity: both sales and employment concentration rose within industry-by-county cells; but reallocation of sales and employment from relatively concentrated Manufacturing industries (e.g., steel mills) towards relatively un-concentrated Service industries (e.g. hair salons) reduced local concentration. A stronger between-sector shift in employment relative to sales drove the net fall in local employment concentration. Holding industry employment shares at their 1992 level, average local employment concentration would have risen by about 9% by 2017. Instead, it fell by 5%. Falling local employment concentration may intensify competition for recent market entrants. Simultaneously, rising within industry-by-geography concentration may weaken competition for incumbent workers who have limited sectoral mobility. To facilitate analysis, we have made data on these trends available for download.

JEL-codes: E23 J42 L10 L11 L22 R11 R12 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-com, nep-geo, nep-ind, nep-lma, nep-tid and nep-ure
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Related works:
Working Paper: Local and National Concentration Trends in Jobs and Sales: The Role of Structural Transformation (2023)
Working Paper: Local and national concentration trends in jobs and sales: the role of structural transformation (2023)
Working Paper: Local and national concentration trends in jobs and sales: The role of structural transformation (2023)
Working Paper: Local and National Concentration Trends in Jobs and Sales: The Role of Structural Transformation (2023)
Working Paper: Local and national concentration trends in jobs and sales: the role of structural transformation (2023)
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