The Influence of Economic Diversity on Unemployment and Stability*

Abstract

For many years, regional scientists, economists, and geographers have been unable to clarify the influence of economic diversity on unemployment and instability in regional economies of the United States, the United Kingdom, and Canada. This article presents plausible theory, proper units of analysis, valid measures, and more inclusive models of the diversity-stability relationship. The findings are generalizable because the sample includes most metropolitan areas in the U.S. The empirical analysis estimates the influence of diversity, employment concentrated in unstable industries, population size, growth rate, and control variables on unemployment and employment instability during the 1972-88 period.The results indicate that metropolitan areas which are more diverse experience lower unemployment rates and less instability than areas which are less diverse.

Quantifying aerosol mixing state with entropy and diversity measures

“…Other important research questions include 120 the sources of diversity (Tsimring et al, 1996;De'ath, 2012), extensions of diversity to include a concept of species distance Chao et al (2010); Leinster and Cobbold (2012);Feoli (2012);Scheiner (2012), and techniques for measuring diversity (Chao and Shen, 2003;Schmera and Podani, 2013;125 Gotelli and Chao, 2013), despite the well-known difficulties in estimating entropy in an unbiased fashion (Harris, 1975;Paninski, 2003). Beyond ecology, the study of diversity is also important in economics (Garrison and Paulson, 1973;Hannah and Kay, 1977;Attaran and Zwick, 1989;Malizia 130 and Ke, 1993;Drucker, 2013), immunology (Tsimring et al, 1996), neuroscience (Panzeri and Treves, 1996;Strong et al, 1998), and genetics (Innan et al, 1999;Rosenberg et al, 2002;Falush et al, 2007). This paper is organized as follows.…”

The Influence of Multiple Specializations on Economic Performance in U.S. Metropolitan Areas

“…For instance, diversity has been measured by normative indicators such as the national average index [37], the Ogive index [38][39][40] and the Entropy index [17,20,21,23]. Economic stability has been measured by unemployment rate [17,20], fluctuations in employment and personal income [41,42] and more complicated indices such as the Regional Economic Instability indicator (REI) by Kort [19]. Nonetheless, these studies arrived at a consistent conclusion that economic diversity was positively associated with economic stability.…”

“…In reality, being specialized does not mean lack of diversity. A region can specialize in multiple industrial pursuits, which is defined as multiple specializations by Malizia and Ke [20]. For instance, Houston, Texas was well known for its specialization in the oil and gas industry.…”

“…Malizia and Ke [20] hypothesized that specializing in more than one industrial sector can bring the benefits of specialization for growth and, at the same time, foster regional economic stability by compensating for one another when one sector is negatively affected by a shock. To date, to our knowledge, the concept of multiple specializations has been only formulated theoretically [20], and empirically measured in terms of the specializations of individual sectors. Thus, there is a need to collectively measure the multiple specializations and empirically test the effect of this measure.…”

“…Besides growth, this paper analyzed economic stability, which is known as another important aspect of regional economic performance related with industrial structure. Studies on industrial structure and stability usually found that industrial diversity increases economic stability [17][18][19][20][21][22]. Scant empirical research analyzed both stability and growth in the same context.…”