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Productivity Dispersion and Structural Change in Retail Trade

Author

Listed:
  • Dominic Smith
  • G. Jacob Blackwood
  • Michael D. Giandrea
  • Cheryl Grim
  • Jay Stewart
  • Zoltan Wolf

Abstract

The retail sector has changed from a sector full of small firms to one dominated by large, national firms. We study how this transformation has impacted productivity levels, growth, and dispersion between 1987 and 2017. We describe this transformation using three overlapping phases: expansion (1980s and 1990s), consolidation (2000s), and stagnation (2010s). We document five findings that help us understand these phases. First, productivity growth was high during the consolidation phase but has fallen more recently. Second, entering establishments drove productivity growth during the expansion phase, but continuing establishments have increased in importance more recently. Third, national chains have more productive establishments than single-unit firms on average, but some single-unit establishments are highly productive. Fourth, productivity dispersion is significant and increasing over time. Finally, more productive firms pay higher wages and grow more quickly. Together, these results suggest that the increasing importance of large national retail firms has been an important driver of productivity and wage growth in the retail sector.

Suggested Citation

  • Dominic Smith & G. Jacob Blackwood & Michael D. Giandrea & Cheryl Grim & Jay Stewart & Zoltan Wolf, 2023. "Productivity Dispersion and Structural Change in Retail Trade," Working Papers 23-60, Center for Economic Studies, U.S. Census Bureau.
    • Handle: RePEc:cen:wpaper:23-60
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    File URL: https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-60R.pdf
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    File URL: https://www2.census.gov/library/working-papers/2023/adrm/ces/CES-WP-23-60.pdf
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    References listed on IDEAS

    as
    1. Lucia Foster & John Haltiwanger & C. J. Krizan, 2006. "Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 748-758, November.
    2. Teresa C. Fort & Shawn D. Klimek, 2018. "The Effects of Industry Classification Changes on US Employment Composition," Working Papers 18-28, Center for Economic Studies, U.S. Census Bureau.
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    Keywords

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    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
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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