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Whittling Away At Productivity Dispersion

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Author Info
Douglas W Dwyer
Abstract

In any time period, in any industry, plant productivity levels differ widely and this dispersion is persistent. This paper explores the sources of this dispersion and their relative magnitudes in the textile industry. Plants that are measured as being more productive but pay higher wages are not necessarily more profitable; wage dispersion can account for approximately 15 percent of productivity dispersion. A plant that is highly productive today may not be as productive tomorrow. I develop a new method for measuring ex-ante dispersion and the percentage of dispersion "explained" by mean reversion. Mean reversion accounts for as much as one half the observed productivity dispersion. A portion of the dispersion, however, appears to reflect real quality differences between plants; plants that are measured as being more productive expand faster and are less likely to exit.

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File URL: http://www.ces.census.gov/index.php/ces/cespapers?down_key=100241
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Publisher Info
Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 95-5.

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Date of creation: Mar 1995
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Handle: RePEc:cen:wpaper:95-5

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Web page: http://www.ces.census.gov

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Related research
Keywords: CES; economic; research; micro; data; microdata; chief; economist;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Doms, Mark E, 1996. "Estimating Capital Efficiency Schedules within Production Functions," Economic Inquiry, Oxford University Press, vol. 34(1), pages 78-92, January.
    Other versions:
  2. Timothy Bates & Darrell Williams, 1995. "Preferential Procurement Programs Do Not Necessarily Help Minority-Owned Business," Working Papers 95-1, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  3. Donald Siegel & Frank R Lichtenberg, 1989. "Using Linked Census R&D-Lrd Data To Analyze The Effect Of R&D Investment On Total Factor Productivity Growth," Working Papers 89-2, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  4. Timothy Dunne & Mark J Roberts, 1992. "Costs, Demand, and Imperfect Competition as Determinants of Plant_level Output Prices," Working Papers 92-5, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  5. Robert H Mcguckin & Thomas A Abbott Iii & Paul E Herrick & Leroy Norfolk, 1989. "Measuring The Trade Balance In Advanced Technology Products," Working Papers 89-1, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  6. Timothy Dunne & Mark J Roberts, 1993. "The Long-Run Demand for Labor: Estimates From Census Establishment Data," Working Papers 93-13, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  7. Timothy Bates, 1995. "Small Businesses Do Appear To Benefit From State/Local Government Economic Development Assistance," Working Papers 95-2, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  8. Martin Neil Baily & Eric J. Bartelsman & John Haltiwanger, 1994. "Downsizing and Productivity Growth: Myth or Reality?," NBER Working Papers 4741, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Mark E. Doms & Timothy Dunne, 1998. "Capital Adjustment Patterns in Manufacturing Plants," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 409-429, April. [Downloadable!] (restricted)
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  10. Dan Kovenock & Gordon M Phillips, 1995. "Capital Structure and Product Market Behavior: An Examination of Plant Exit and Investment Decisions," Working Papers 95-4, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  11. Timothy Bates, 1990. "Self-Employment Trends Among Mexican Americans," Working Papers 90-9, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  12. James D Adams, 1994. "Recent Twists of the Wage Structure and Technology Diffusion," Working Papers 94-5, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  13. Kenneth R Troske, 1994. "Evidence on the Employer Size-Wage Premium From Worker-Establishment Matched Data," Working Papers 94-10, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  14. James D Adams & Suzanne Peck, 1994. "A Guide To R&D Data At The Center For Economic Studies U.S. Bureau Of THe Census," Working Papers 94-9, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  15. Wayne B Gray & Ronald J Shadbegian, 1993. "Environmental Regulation And Manufacturing Productivity At The Plant Level," Working Papers 93-6, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
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  16. Ron Jarmin, 1993. "Asymmetric Learning Spillovers," Working Papers 93-7, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  17. Kovenock, Dan & Phillips, Gordon, 1995. "Capital Structure and Product-Market Rivalry: How Do We Reconcile Theory and Evidence?," American Economic Review, American Economic Association, vol. 85(2), pages 403-08, May. [Downloadable!] (restricted)
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  18. Sang V Nguyen & Edward C Kokkelenberg, 1988. "Modelling Technical Progress And Total Factor Productivity: A Plant Level Example," Working Papers 88-4, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  19. Mark E Doms, 1993. "Inter Fuel Substitution And Energy Technology Heterogeneity In U.S. Manufacturing," Working Papers 93-5, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  20. Kenneth R Troske, 1992. "The Time-Series Pattern Of Firm Growth In Two Industries," Working Papers 92-10, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Robert H Mcguckin & Bradford J Jensen, 1996. "Firm Performance And Evolution Empirical Regularities In The U.S. Microdata," Working Papers 96-10, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
    Other versions:
  2. Timothy Dunne & John Haltiwanger & Lucia Foster, 2000. "Wage and Productivity Dispersion in U.S. Manufacturing: The Role of Computer Investment," NBER Working Papers 7465, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Douglas W Dwyer, 1997. "Productivity Races I: Are Some Productivuty Measures Better Than Others?," Working Papers 97-2, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  4. Douglas W Dwyer, 1997. "Productivity Races II: The Issue of Capital Measurement," Working Papers 97-3, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  5. Douglas Dwyer, 1998. "Technology Locks, Creative Destruction, and Non-Convergence in Productivity Levels," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 430-473, April. [Downloadable!] (restricted)
    Other versions:
  6. Douglas W Dwyer, 1996. "Whittling Away At Productivity Dispersion Futher Notes: Persistent Dispersion or Measurement Error?," Working Papers 96-11, Center for Economic Studies, U.S. Census Bureau. [Downloadable!]
  7. Boyan Jovanovic, 1998. "Michael Gort's Contribution to Economics," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(2), pages 327-337, April. [Downloadable!] (restricted)
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This page was last updated on 2009-11-13.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.