What is the status of economic diversification in my community?
Economic recessions do happen, and the effects may be more severe in some counties than in others, even within the same state. Some communities and industries have the ability to recover from economic shocks such as a prolonged recession and some have a more difficult time. Studies have revealed that the more diversified economies have better chances of recovering from an economic shock. The “economic diversification” index measures diversification or distribution of employment shares in different industry sectors. If jobs are distributed equitably across several different industry sectors, the community’s economy is more diversified and vice versa. The economic diversification index does not depend on the employment base but how the employment is distributed across different industry sectors. Even a county with a small employment base might show a higher index value or a more diversified economy while a county with a large employment base but a greater concentration of jobs in only on
