EconPapers    
Economics at your fingertips  
 

Downsizing and Productivity Growth: Myth or Reality?

Martin Neil Baily, Eric Bartelsman () and John Haltiwanger

No 4741, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: E23 E24 (search for similar items in EconPapers)
Date: 1994-05
Note: EFG PR
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (16) Track citations by RSS feed

Published as Small Business Economics, Vol. 8, no. 4 (August 1996): pp. 259-278.

Downloads: (external link)
http://www.nber.org/papers/w4741.pdf (application/pdf)

Related works:
Journal Article: Downsizing and Productivity Growth: Myth or Reality? (1996)
Working Paper: Downsizing and Productivity Growth: Myth or Reality? (1994) Downloads
Working Paper: Downsizing and productivity growth: myth or reality? (1994)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:4741

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w4741

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Series data maintained by ().

 
Page updated 2017-11-28
Handle: RePEc:nbr:nberwo:4741