Outsourcing, Occupational and Industrial Concentration∗

We use data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau to investigate the concentration of rms, occupations, and industries over time. We nd strong evidence for increased concentration of rms in terms of a secular decrease in the number of occupations and industries in which rms are active. The mean number of 5-digit occupations per establishment has fallen from 6.5 to 5.5 since 2000, with the top 3 occupations now accounting for over 85% of total establishment employment. Firm employment and payroll is increasingly concentrated in a few core industries. We argue that the rise of outsourcing and pressure on rms to focus on their core competencies is driving this concentration of activities within rms. Finally, we argue this could play a role for the rising segregation of employees by income and education across rms. JEL No. L2, M2, O32, O33.