IDEAS home Printed from https://ideas.repec.org/p/ags/motuwp/290582.html

Firm Productivity Growth and Skill

Author

Listed:
  • Mare, David C.
  • Hyslop, Dean R
  • Fabling, Richard

Abstract

This paper examines the relationship between firm multifactor productivity growth (mfp) and changing skill levels of labour in New Zealand, over the period 2001-12, using longitudinal data from Statistics New Zealand’s Longitudinal Business Database (LBD) and Integrated Data Infrastructure (IDI). We estimate that the average skill of workers declined by 1.8% over the period, reflecting strong employment growth for workers with lower than average skill levels. The net decline was the combined effect of a 3.6% decline in unobserved skill outweighing a 1.8% increase in observed skill, resulting in 1.8% slower estimated skill-adjusted labour growth (13.3%) than the 15.0% growth in full-time equivalent (FTE) employment. Mirroring the skill-dilution, skill-adjusted mfp growth averaged 0.24% per annum over the period compared to 0.14% pa for unadjusted growth. The patterns were stronger over the pre-GFC period to 2008, during which adjusted and unadjusted mfp grew 0.57% pa and 0.42% pa respectively. Our analysis of the effect of changing skill on mfp growth finds that the impact of skill adjustment was almost entirely due to changing skill composition within continuing firms.

Suggested Citation

  • Mare, David C. & Hyslop, Dean R & Fabling, Richard, 2015. "Firm Productivity Growth and Skill," Motu Working Papers 290582, Motu Economic and Public Policy Research.
    • Handle: RePEc:ags:motuwp:290582
    DOI: 10.22004/ag.econ.290582
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/290582/files/15_18.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.290582?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Richard Fabling & David C. Maré, 2016. "Firm-Level Hiring Difficulties: Persistence, Business Cycle And Local Labour Market Influences," Journal of Labor Research, Springer, vol. 37(2), pages 179-210, June.
    3. Paul Conway, 2018. "Can the Kiwi Fly? Achieving Productivity Lift-off in New Zealand," International Productivity Monitor, Centre for the Study of Living Standards, vol. 34, pages 40-63, Spring.
    4. Richard Fabling & David Maré, 2024. "Pay in Māori-led firms," Motu Working Papers 24_05, Motu Economic and Public Policy Research.
    5. Isabelle Sin & Steven Stillman & Richard Fabling, 2017. "What drives the gender wage gap? Examining the roles of sorting, productivity differences, and discrimination," Motu Working Papers 17_15, Motu Economic and Public Policy Research.
    6. Mare, David C., 2016. "Urban productivity estimation with heterogeneous prices and labour," Motu Working Papers 290558, Motu Economic and Public Policy Research.
    7. Anneleen Vandeplas & Anna Thum-Thysen, 2019. "Skills Mismatch and Productivity in the EU," European Economy - Discussion Papers 100, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    8. Guanyu Zheng, 2016. "Geographic proximity and productivity convergence across New Zealand firms," Working Papers 2016/04, New Zealand Productivity Commission.
    9. Richard Fabling & David C Maré & Philip Stevens, 2022. "Migration and firm-level productivity," Working Papers 2022/01, New Zealand Productivity Commission.
    10. Mare, David C. & Le, Trinh & Fabling, Richard & Chappell, Nathan, 2017. "Productivity and the allocation of skills," Motu Working Papers 290522, Motu Economic and Public Policy Research.
    11. Nathan Chappell & Adam B. Jaffe & Trinh Le, 2018. "Worker Flows, Entry and Productivity in the New Zealand Construction Industry," NBER Working Papers 24376, National Bureau of Economic Research, Inc.
    12. Fabling Richard, 2024. "Still medalling: Productivity gets a bronze (data source)," Motu Working Papers 24_06, Motu Economic and Public Policy Research.
    13. Fabling, Richard & Mare, David C., 2019. "Improved productivity measurement in New Zealand's Longitudinal Business Database," Motu Working Papers 290393, Motu Economic and Public Policy Research.
    14. Fabling, Richard & Mare, David C, 2015. "Addressing the absence of hours information in linked employer-employee data," Motu Working Papers 290583, Motu Economic and Public Policy Research.
    15. Fabling, Richard, 2018. "Entrepreneurial beginnings: Transitions to selfemployment and the creation of jobs," Motu Working Papers 290499, Motu Economic and Public Policy Research.
    16. Lynda Sanderson, 2024. "Born in bad times: Economic conditions, selection and employment," Working Papers 2024/01, New Zealand Productivity Commission.
    17. Rho, Yeirae & Fabrizi, Simona & Lippert, Steffen, 2021. "Employee characteristics, absorptive capacity and innovation," MPRA Paper 106407, University Library of Munich, Germany, revised 04 Mar 2021.
    18. Sin, Isabelle & Fabling, Richard & Jaffe, Adam B, & Mare, David C. & Sanderson, Lynda, 2014. "Exporting, Innovation and the Role of Immigrants," Motu Working Papers 290599, Motu Economic and Public Policy Research.
    19. Richard Fabling, 2021. "Living on the edge: An anatomy of New Zealand's most productive firms," Motu Working Papers 21_01, Motu Economic and Public Policy Research.

    More about this item

    Keywords

    ;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:motuwp:290582. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/motuenz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.