DP4689 Employment Concentration Across US Counties

Author(s): Klaus Desmet , Marcel Fafchamps

Publication Date: October 2004

Keyword(s): spatial distribution of employment , ergodic distribution , US counties , economic geography

JEL(s): R11 , R12

Programme Areas: International Trade and Regional Economics

Link to this Page: www.cepr.org/pubs/dps/DP4689.asp

This Paper examines the spatial distribution of jobs across US counties and investigates whether sectoral employment is becoming more or less concentrated. The existing literature has found deconcentration (convergence) of employment across urban areas. Cities only cover a small part of the US though. Using county data, our results indicate that deconcentration is limited to the upper tail of the distribution. The overall picture is one of increasing concentration (divergence). While this seemingly contradicts the well-documented deconcentration in manufacturing, we show that these aggregate employment dynamics are driven by services. Non-service sectors – such as manufacturing and farming – are indeed becoming more equally spread across space, but services are becoming increasingly concentrated.