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Productivity Growth And Worker Reallocation

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  • Rasmus Lentz
  • Dale T. Mortensen

Abstract

Productivity dispersion across firms is large and persistent, and worker reallocation among firms is an important source of productivity growth. An equilibrium model of growth and firm evolution designed to clarify the role of worker reallocation in the growth process is studied. We show that it explains the correlations between size measures and labor productivity found in Danish firm data. Conditions under which the reallocation of workers from less to more productive firms contributes to aggregate productivity growth in the economy modeled are derived. Finally, a proof of existence of an equilibrium solution to the model is also provided. Copyright 2005 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Suggested Citation

  • Rasmus Lentz & Dale T. Mortensen, 2005. "Productivity Growth And Worker Reallocation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 731-749, August.
  • Handle: RePEc:ier:iecrev:v:46:y:2005:i:3:p:731-749
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    Citations

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    Cited by:

    1. Giulia Faggio & Kjell G. Salvanes & John Van Reenen, 2010. "The evolution of inequality in productivity and wages: panel data evidence," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1919-1951, December.
    2. Nagore García, Amparo & van Soest, Arthur, 2015. "New Job Matches and Their Stability Before and During the Crisis," IZA Discussion Papers 9574, Institute for the Study of Labor (IZA).
    3. Rasmus Lentz & Dale T. Mortensen, 2008. "An Empirical Model of Growth Through Product Innovation," Econometrica, Econometric Society, vol. 76(6), pages 1317-1373, November.
    4. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2009. "The Margins of U.S. Trade (Long Version)," NBER Working Papers 14662, National Bureau of Economic Research, Inc.
    5. Bernard, Andrew B. & Redding, Stephen & Schott, Peter.K, 2006. "Multi-product firms and product switching," LSE Research Online Documents on Economics 3687, London School of Economics and Political Science, LSE Library.
    6. Cucculelli, Marco & Ermini, Barbara, 2012. "New product introduction and product tenure: What effects on firm growth?," Research Policy, Elsevier, vol. 41(5), pages 808-821.
    7. Carlos Carrillo-Tudela, 2010. "Job Search, Human Capital and Wage Inequality," 2010 Meeting Papers 723, Society for Economic Dynamics.
    8. Zheng, Jianghuai & Hu, Zhining & Wang, Jialing, 2008. "Entrepreneurship, Innovation and Economic Growth:The Case of Yangtze River Delta in China," MPRA Paper 8919, University Library of Munich, Germany.
    9. Pietro Garibaldi & Espen Moen & Dag-Einar Sommervoll, 2016. "Competitive On-the-job Search," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 19, pages 88-107, January.
    10. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2011. "Multiproduct Firms and Trade Liberalization," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1271-1318.
    11. Guerreiro, David & Mignon, Valérie, 2013. "On price convergence in Eurozone," Economic Modelling, Elsevier, vol. 34(C), pages 42-51.
    12. Almeida, Rita & Carneiro, Pedro, 2008. "Mandated benefits, employment, and inequality in a dual economy," Social Protection and Labor Policy and Technical Notes 45051, The World Bank.
    13. Valkonen, Laura, 2006. "Deregulation as a Means to Increase Competition and Productivity," Discussion Papers 1014, The Research Institute of the Finnish Economy.
    14. Carlos Carrillo-Tudela & Eric Smith, 2017. "Search Capital," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 23, pages 191-211, January.
    15. Jens Krüger, 2014. "Intrasectoral structural change and aggregate productivity development: robust stochastic nonparametric frontier function estimates," Empirical Economics, Springer, vol. 46(4), pages 1545-1572, June.
    16. Espen R. Moen, 2008. "Industry Dynamics and Search in the Labor Market," 2008 Meeting Papers 572, Society for Economic Dynamics.
    17. Kenneth Burdett, 2014. "A Tribute to Dale Mortensen," EconomicDynamics Newsletter, Review of Economic Dynamics, vol. 15(1), April.
    18. Andrew B. Bernard & J. Bradford Jensen & Stephen J. Redding & Peter K. Schott, 2009. "The Margins of US Trade," American Economic Review, American Economic Association, vol. 99(2), pages 487-493, May.
    19. Fernandes, Cristina & Ferreira, João & Raposo, Mario, 2013. "Drivers to firm innovation and their effects on performance: An international comparison," MPRA Paper 46776, University Library of Munich, Germany.
    20. Piercarlo Zanchettin & Vincenzo Denicolò, 2009. "Leadership Cycles," Discussion Papers in Economics 09/25, Department of Economics, University of Leicester.
    21. Sebastian Benz & Mario Larch & Markus Zimmer, 2014. "The structure of the German economy," Applied Economics, Taylor & Francis Journals, vol. 46(27), pages 3274-3283, September.
    22. Şeker, Murat, 2012. "A structural model of firm and industry evolution: Evidence from Chile," Journal of Economic Dynamics and Control, Elsevier, vol. 36(6), pages 891-913.
    23. Nagore Garcia, A. & van Soest, Arthur, 2016. "New Job Matches and their Stability before and during the Crisis," Discussion Paper 2016-033, Tilburg University, Center for Economic Research.

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