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Dispersion in Dispersion: Measuring Establishment-Level Differences In Productivity

Author

Listed:
  • Cunningham, Cindy

    (U.S. Bureau of Labor Statistics)

  • Foster, Lucia

    (U.S. Census Bureau)

  • Grim, Cheryl

    (U.S. Census Bureau)

  • Haltiwanger, John C.

    (University of Maryland)

  • Pabilonia, Sabrina Wulff

    (U.S. Bureau of Labor Statistics)

  • Stewart, Jay

    (U.S. Bureau of Labor Statistics)

  • Wolf, Zoltan

    (U.S. Census Bureau)

Abstract

We describe new experimental productivity statistics, Dispersion Statistics on Productivity (DiSP), jointly developed and published by the Bureau of Labor Statistics (BLS) and the Census Bureau. Official BLS productivity statistics provide information on aggregate productivity growth. Yet, a large body of research shows that within-industry variation in productivity provides important insights into productivity dynamics. This research reveals large and persistent productivity differences across businesses, even within narrowly defined industries. These differences vary by industry and time and are related to productivityenhancing reallocation. Dispersion in productivity across businesses can provide information about the nature of competition and frictions within sectors, and about the sources of rising wage inequality across businesses. Because there were no official statistics providing this level of detail, BLS and the Census Bureau partnered to create measures of within-industry productivity dispersion. These measures complement official BLS aggregate industry-level productivity growth statistics and thereby improve our understanding of the rich productivity dynamics in the U.S. economy. The microdata underlying DiSP are available for use by qualified researchers on approved projects in the Federal Statistical Research Data Center network. DiSP confirms the presence of large productivity differences, and we hope that it will encourage further research into understanding these differences.

Suggested Citation

  • Cunningham, Cindy & Foster, Lucia & Grim, Cheryl & Haltiwanger, John C. & Pabilonia, Sabrina Wulff & Stewart, Jay & Wolf, Zoltan, 2021. "Dispersion in Dispersion: Measuring Establishment-Level Differences In Productivity," IZA Discussion Papers 14459, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14459
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    References listed on IDEAS

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    Cited by:

    1. Nicholas Bloom & Scott W. Ohlmacher & Cristina J. Tello-Trillo & Melanie Wallskog, 2021. "Pay, Productivity and Management," NBER Working Papers 29377, National Bureau of Economic Research, Inc.
    2. Lucia Foster & Cheryl Grim & John C. Haltiwanger & Zoltan Wolf, 2019. "Innovation, Productivity Dispersion, and Productivity Growth," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 103-136, National Bureau of Economic Research, Inc.
    3. Gonzales-Rocha, Erick & Mendez-Guerra, Carlos, 2018. "Increasing productivity dispersion: Evidence from light manufacturing in Brazil," MPRA Paper 88478, University Library of Munich, Germany.
    4. Diane Coyle & Jen‐Chung Mei, 2023. "Diagnosing the UK productivity slowdown: which sectors matter and why?," Economica, London School of Economics and Political Science, vol. 90(359), pages 813-850, July.
    5. Lafond, François & Farmer, J. Doyne & Koutroumpis, Pantelis & Winkler, Julian & Heinrich, Torsten & Yang, Jangho, 2019. "Measuring productivity dispersion: a parametric approach using the Lévy alpha-stable distribution," INET Oxford Working Papers 2019-14, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    6. Benjamin Schoefer & Oren Ziv, 2021. "Productivity, Place, and Plants," NBER Working Papers 28772, National Bureau of Economic Research, Inc.
    7. Evguenia Bessonova & Anna Tsvetkova, 2019. "Productivity convergence trends within Russian industries: firm-level evidence," Bank of Russia Working Paper Series wps51, Bank of Russia.
    8. Bessonova, E. & Tsvetkova, A., 2020. "Productivity growth and inefficient firms' exit from the market," Journal of the New Economic Association, New Economic Association, vol. 48(4), pages 185-196.

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    More about this item

    Keywords

    reallocation; within-industry variation; establishments; business cycles; manufacturing;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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