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The Role of Nonemployers in Business Dynamism and Aggregate Productivity

Pedro Bento and Diego Restuccia

Working Papers from University of Toronto, Department of Economics

Abstract: A decline in the net entry rate of employer firms in the United States in the last decades, a decline in business dynamism, may explain the observed productivity slowdown. We consider the role of nonemployers, businesses without paid employees, in business dynamism and aggregate productivity. Despite the decline in the growth of employer firms, the total number of firms has increased since the early 1980s, which in the context of a standard model of firm dynamics implies an average annual growth of aggregate productivity of 0.26-0.39\%, over one quarter of the productivity growth in the data.

Keywords: nonemployers; employer firms; business dynamism; productivity; TFP. (search for similar items in EconPapers)
JEL-codes: E1 O4 O51 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2020-01-31
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ent, nep-mac and nep-sbm
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Related works:
Working Paper: The Role of Nonemployers in Business Dynamism and Aggregate Productivity (2022) Downloads
Working Paper: The Role of Nonemployers in Business Dynamism and Aggregate Productivity (2021) Downloads
Working Paper: The Role of Nonemployers in Business Dynamism and Aggregate Productivity (2019) Downloads
Working Paper: The Role of Nonemployers in Business Dynamism and Aggregate Productivity (2019) Downloads
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