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Dispersion in Dispersion: Measuring Establishment‐Level Differences in Productivity

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  • Cindy Cunningham
  • Lucia Foster
  • Cheryl Grim
  • John Haltiwanger
  • Sabrina Wulff Pabilonia
  • Jay Stewart
  • Zoltan Wolf

Abstract

We describe new experimental productivity dispersion statistics, Dispersion Statistics on Productivity (DiSP), jointly produced by the Bureau of Labor Statistics (BLS) and the Census Bureau, that complement the official BLS industry‐level productivity statistics. The BLS has a long history of producing industry‐level productivity statistics, which represent the average establishment‐level productivity within industries when appropriately weighted. These statistics cannot, however, tell us about the variation in productivity levels across establishments within those industries. Dispersion in productivity across businesses can provide information about the nature of competition and frictions within sectors and the sources of rising wage inequality across businesses. DiSP data show enormous differences in productivity across establishments within industries in the manufacturing sector. We find substantial variation in dispersion across industries, increasing dispersion from 1997 to 2016, and countercyclical total factor productivity dispersion. We hope DiSP will enable further research into understanding productivity differences across industries and establishments and over time.

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  • Cindy Cunningham & Lucia Foster & Cheryl Grim & John Haltiwanger & Sabrina Wulff Pabilonia & Jay Stewart & Zoltan Wolf, 2023. "Dispersion in Dispersion: Measuring Establishment‐Level Differences in Productivity," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(4), pages 999-1032, December.
    • Handle: RePEc:bla:revinw:v:69:y:2023:i:4:p:999-1032
    DOI: 10.1111/roiw.12616
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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

    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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