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Coordinated firm-level work processes and macroeconomic resilience

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  • Kuhn, Moritz
  • Luo, Jinfeng
  • Manovskii, Iourii
  • Qiu, Xincheng

Abstract

The production processes at many firms rely on a highly choreographed and interdependent network of workers performing specialized jobs. We designed and implemented a targeted employer survey to measure the extent of coordination in work processes. We link this firm-level coordination measure to administrative data and find that firms with a more coordinated work process are more productive, pay higher wages, and experience lower worker turnover. Yet, these firms suffer more severe negative consequences from unexpected worker absences and adopt various strategies to mitigate such risk, the reliance on which we document. We also find that more coordinated employers suffer worse consequences of negative aggregate shocks. Finally, we discuss policies that may encourage firms to adopt more productive coordinated work processes by increasing the resilience of coordinated employers to negative idiosyncratic or aggregate shocks.

Suggested Citation

  • Kuhn, Moritz & Luo, Jinfeng & Manovskii, Iourii & Qiu, Xincheng, 2023. "Coordinated firm-level work processes and macroeconomic resilience," Journal of Monetary Economics, Elsevier, vol. 137(C), pages 107-127.
  • Handle: RePEc:eee:moneco:v:137:y:2023:i:c:p:107-127
    DOI: 10.1016/j.jmoneco.2023.05.001
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    1. Christian Bayer & Moritz Kuhn, 2023. "Job Levels and Wages," SOEPpapers on Multidisciplinary Panel Data Research 1190, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Freund, L. B., 2022. "Superstar Teams: The Micro Origins and Macro Implications of Coworker Complementarities," Cambridge Working Papers in Economics 2276, Faculty of Economics, University of Cambridge.
    3. Sztachera, Maciej, 2024. "Hours, wages, and multipliers," MPRA Paper 121556, University Library of Munich, Germany.

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    More about this item

    Keywords

    Labor markets; Coordination; Economic resilience; Work process; Covid-19;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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