Diversification, Offshoring and Labor Market Volatility. By Ashok Bardhan, Haas School of Business, University of California, Berkeley and John Tang, Department of Economics, University of California, Berkeley. Fisher Center for Real Estate & Urban Economics Working Papers. Paper 299. (The Center, Berkeley, California) 2006. 23 p.
Full Text at: repositories.cdlib.org/cgi/viewcontent.cgi?article=1039&context=iber/fcreue
["This paper asks a simple question: Are occupations that are well diversified across sectors less volatile, and maybe 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, and as a consequence they affect employment in various occupations. Some shocks,
however, such as services offshoring affect horizontals or occupations. We find that an occupation spread out across many industrial sectors is less volatile, both 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."]