Occupational and industrial diversification in the United States: Implications of the new spatial division of labor

Traditionally, industrial diversification has been stressed as a tool for achieving economic growth and development. The literature on the spatial division of labor also incorporates the importance of occupational structure while recognizing the continued role of industrial structure. This paper examines the changing association between industrial and occupational diversification and the associations of industrial and occupational diversification with indicators of the business environment. The results indicate a weakening association between the industrial and occupational employment structures over time. Industrial diversification continues to be important for economic development but occupational diversification operates somewhat differently. For example, a trend toward occupational diversification is associated with employment growth but with lower levels of income. This suggests that occupational diversity may not necessarily ensure job quality, and hence, the lower levels of income.