Occupational Diversification, Offshoring and Labor Market Volatility

Bardhan, Ashok and Tang, John (2006): Occupational Diversification, Offshoring and Labor Market Volatility. Unpublished.

Abstract

Are occupations that are well diversified across sectors less volatile, and less susceptible to external shocks? Most external shocks (e.g. manufacturing offshoring, oil shocks) impact the labor market along sectoral lines, i.e. they impact product and output markets; consequently, they affect employment in various occupations. Some shocks, however, like services offshoring, affect horizontals or occupations. We find that an occupation spread across many industrial sectors is less volatile in terms of numbers employed and the average wage. A dummy variable for offshoreable occupations does not affect the results; however, geographically clustered occupations seem more “at-risk,” after accounting for sectoral diversification.

• Item Type: MPRA Paper
• Institution: University of California, Berkeley - Haas School of Business
• Language: English
• Keywords: offshoring; external shocks; labor market volatility; occupations; diversification; geographic clusters
• Subjects: J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies; F - International Economics > F2 - International Factor Movements and International Business

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