National U.S. industrial concentration rose between 1992-2017. Simultaneously, the Herfindhahl Index of local (six-digit-NAICS by county) employment concentration fell. This divergence between national and local employment concentration is due to structural transformation. Both sales and employment concentration rose within industry-by-county cells. But activity shifted from concentrated Manufacturing towards relatively un-concentrated Services. A stronger between-sector shift in employment relative to sales explains the fall in local employment concentration. Had sectoral employment shares remained at their 1992 levels, average local employment concentration would have risen by 9% by 2017 rather than falling by 7%.

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David Autor, Christina Patterson and John Van Reenen

19 April 2023     Paper Number CEPDP1916

Download PDF - Local and national concentration trends in jobs and sales: the role of structural transformation

This CEP discussion paper is published under the centre's Growth programme.