A New Geography for Information Technology Activity?

This paper utilizes data reported by the Bureau of Labor Statistics’ Occupational Employment Survey (OES) to estimate relative cost-of-living (COL) indices for each state. Information Technology (IT) activity (as opposed to industry) is defined by employment in computer and math-related occupations (SOC 15). Occupational location quotients were calculated to identify the current distribution of IT. Money wages for these occupations were deflated by estimated state COL’s to obtain real wages. Under the assumption that capital flows respond to relative money wages while labor responds to real salaries, future growth trajectories for currently specialized states as well as potentially specializing states are investigated. Results indicate a likely geographic dispersal of IT. Finally, policy recommendations are made