Downsizing and productivity growth: myth or reality?
The conventional wisdom is that the rising productivity in the U.S. manufacturing sector in the 1980s has been driven by the apparently pervasive downsizing over this period. Aggregate evidence clearly shows falling employment accompanying the rise in productivity. In this paper, we examine the microeconomic evidence using the plant level data from the Longitudinal Research Database (LRD). In contrast to the conventional wisdom, we find that plants that increased employment as well as productivity contribute almost as much to overall productivity growth in the 1980s as the plants that increased productivity at the expense of employment. Further, there are striking differences by sector (defined by industry, size, region, wages, and ownership type) in the allocation of plants in terms of whether they upsize or downsize and whether they increase or decrease productivity. Nevertheless, in spite of the striking differences across sectors defined in a variety of ways, most of the variance of productivity and employment growth is accounted for by idiosyncratic factors.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||1994|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.federalreserve.gov/
More information through EDIRC
|Order Information:||Web: http://www.federalreserve.gov/pubs/feds/fedsorder.html|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan Manning, 1992. "Productivity Growth, Wage Setting and the Equilibrium Rate of Unemployment," CEP Discussion Papers dp0063, Centre for Economic Performance, LSE.
- Steven J. Davis & John C. Haltiwanger & Scott Schuh, 1998. "Job Creation and Destruction," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262540932, June.
- Fallick, Bruce Chelimsky, 1996.
"The hiring of new labor by expanding industries,"
Elsevier, vol. 3(1), pages 25-42, August.
- Giuseppe Nicoletti & Lucrezia Reichlin, 1993.
"Trends and Cycles in Labour Productivity in the Major OECD Countries,"
OECD Economics Department Working Papers
129, OECD Publishing.
- Nicoletti, Giuseppe & Reichlin, Lucrezia, 1993. "Trends and Cycles in Labour Productivity in the Major OECD Countries," CEPR Discussion Papers 808, C.E.P.R. Discussion Papers.
- Hellerstein, Judith K & Neumark, David, 1999.
"Sex, Wages, and Productivity: An Empirical Analysis of Israeli Firm-Level Data,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 95-123, February.
- Hellerstein, J-K & Neumark, D, 1995. "Sex, Wages, and Productivity : an Empirical Analysis of Israeli, Firm-Level Data," Papers 9501, Michigan State - Econometrics and Economic Theory.
- Donald Siegel & Zvi Griliches, 1992.
"Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing,"
in: Output Measurement in the Service Sectors, pages 429-460
National Bureau of Economic Research, Inc.
- Donald Siegel & Zvi Griliches, 1991. "Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing," NBER Working Papers 3678, National Bureau of Economic Research, Inc.
- Bernanke, Ben S & Parkinson, Martin L, 1991.
"Procyclical Labor Productivity and Competing Theories of the Business Cycle: Some Evidence from Interwar U.S. Manufacturing Industries,"
Journal of Political Economy,
University of Chicago Press, vol. 99(3), pages 439-59, June.
- Ben S. Bernanke & Martin L. Parkinson, 1990. "Procyclical Labor Productivity and Competing Theories of the Business Cycle: Some Evidence from Interwar U.S. Manufacturing Industries," NBER Working Papers 3503, National Bureau of Economic Research, Inc.
- Davis, Steven J & Haltiwanger, John C, 1992.
"Gross Job Creation, Gross Job Destruction, and Employment Reallocation,"
The Quarterly Journal of Economics,
MIT Press, vol. 107(3), pages 819-63, August.
- Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
- Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
- Aghion, Philippe & Howitt, Peter, 1991. "Unemployment : A symptom of stagnation or a side-effect of growth?," European Economic Review, Elsevier, vol. 35(2-3), pages 535-541, April.
- Robert J. Gordon, 1993. "The Jobless Recovery: Does It Signal a New Era of Productivity-led Growth?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(1), pages 271-316.
- Venables, Anthony J, 1985. "The Economic Implications of a Discrete Technical Change," Oxford Economic Papers, Oxford University Press, vol. 37(2), pages 230-48, June.
- Steven J. Davis & John Haltiwanger & Scott Schuh, 1993.
"Small Business and Job Creation: Dissecting the Myth and Reassessing theFacts,"
NBER Working Papers
4492, National Bureau of Economic Research, Inc.
- Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. " Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
- Nickell, S. & Komg, P., 1989. "Technical Progress And Jobs," Papers 366, London School of Economics - Centre for Labour Economics.
When requesting a correction, please mention this item's handle: RePEc:fip:fedgfe:94-7. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kris Vajs)
If references are entirely missing, you can add them using this form.