Large firms and the cyclicality of US labour productivity

Joshua Brault and Hashmat Khan

Journal of Macroeconomics, 2024, vol. 82, issue C

Abstract: We present novel stylized facts on the declining cyclicality of labour productivity for large firms. Changes in their output-labour productivity correlations mirror those in aggregate US data. Large firms account for 88% of the aggregate labour productivity-output correlation post-1985. The decline in cyclicality aligns with their increased use of extensive margin adjustments, such as hiring more workers. For a 1% output increase, large firms hire 75 additional workers pre-1985, compared to 90 post-1985. Our findings are relevant to the literature on the role of large firms in US business cycles.

Keywords: Large firms; Labour productivity; Business cycles (search for similar items in EconPapers)
JEL-codes: D22 E24 E32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:82:y:2024:i:c:s0164070424000570

DOI: 10.1016/j.jmacro.2024.103643

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