Purchased Services, Outsourcing, Computers, and Productivity in Manufacturing
Increases in purchased services, foreign outsourcing, and investments in computers are alleged to have resulted in an understatement of input growth in manufacturing, and thus. overstatement of growth in productivity. GNP, and value-added in industries heavily engaged in these activities. Based on Census Bureau data, we examine whether the recent (post-1979) improvement in measured manufacturing productivity growth can be attributed to an increase in the rate of foreign and domestic outsourcing. Our preliminary evidence, based on data that are not comprehensive, suggests that an industry's propensity to outsource is unrelated to its acceleration in productivity. In auditing the industry numbers, we found that a non-negligible number of sectors were not consistently defined over time. Using industry and establishment-level data sets (the NBER 4-digit SIC Productivity data set and the Longitudinal Research Database), we conclude that some of these anomalies may be due to the general decline in the magnitude of information solicited from establishments by the Census Bureau in conducting its economic surveys. Another consistency problem explored in this paper is the industry reclassification of large plants. Although these definitional and sampling problems are troubling and need to be carefully documented, there does not appear to be a systematic relationship between an industry's post-1979 productivity growth and attrition or "switches" in its ASM plants. We do find, however, positive and statistically significant relationship between total factor productivity growth and an industry's rate of investment in Computers.
|Date of creation:||Apr 1991|
|Date of revision:|
|Publication status:||published as Output Measurement in the Service Sectors, ed. Zvi Griliches. Chicago: University of Chicago Press, UCP 1992, pp.429-458.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- Martin Neil Baily & Robert J. Gordon, 1988. "The Productivity Slowdown, Measurement Issues, and the Explosion of Computer Power," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 347-432.
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- Zvi Griliches, 1998.
"R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?,"
in: R&D and Productivity: The Econometric Evidence, pages 213-240
National Bureau of Economic Research, Inc.
- Zvi Griliches & Frank R. Lichtenberg, 1984. "R&D and Productivity Growth at the Industry Level: Is There Still a Relationship?," NBER Chapters, in: R&D, Patents, and Productivity, pages 465-502 National Bureau of Economic Research, Inc.
- Lichtenberg, Frank R & Siegel, Donald, 1990. "The Effect of Ownership Changes on the Employment and Wages of Central Office and Other Personnel," Journal of Law and Economics, University of Chicago Press, vol. 33(2), pages 383-408, October.
- Robert H Mcguckin & George A Pascoe, 1988. "The Longitudinal Research Database (LRD): Status And Research Possibilities," Working Papers 88-2, Center for Economic Studies, U.S. Census Bureau.
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