States' Nonagricultural Employment at the 3-Digit North American Industry Classification System (NAICS) Level

The focus of this research is to address the question of nonagricultural employment di-versity at the state level for 2002, employing the newer 3-digit North American Industry Clas-sification System (3-digit NAICS). The index of diversity used is the Simpson index. A second facet of the paper includes a comparison of states’ diversity to that of the United States as the norm. The results indicate that, with a few exceptions, diversity of employment in the majority of states does not differ statistically from employment diversity in the United States as a whole. Further findings indicate that specialization explains employment growth with statistically significant correlation between employment growth and specialization.