How Specialized is “Too” Specialized? Outmigration and Industry Diversification in Nonmetropolitan Counties across America

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Ashley Poston Brian E Whitacre

Abstract

Outmigration and industrial composition have separately been the focalpoints of a significant amount of research related to nonmetropolitan counties; however,few (if any) studies have explicitly looked at the relationship between the two topics. Theprimary objective of this research is to identify what industry specialization level is “too”specialized with regards to net migration – that is, to determine the level wherespecialization begins to have a damaging (or positive) effect on population change.County-level data from a variety of sources is used to explore the impact of both earningsbasedand employment-based definitions of specialization on net migration innonmetropolitan counties from 2000 – 2009. Two distinct techniques (ordinary leastsquares and average treatment effects) are then used to assess both the impact andcausality of being highly specialized. The results confirm that some types of specializationare related to outmigration, while others encourage in-migration. Implications foreconomic developers in nonmetropolitan areas include being wary of cluster-basedstrategies and tracking their own local levels of employment-based specialization. (R2,R58, O15)

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