Making Do with Less: Working Harder During Recessions

46 Pages Posted: 7 Aug 2013 Last revised: 14 Jun 2014

Edward P. Lazear

Stanford Graduate School of Business; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Kathryn L. Shaw

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Christopher Stanton

National Bureau of Economic Research (NBER); London School of Economics & Political Science (LSE); University of Utah - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: June 5, 2014

Abstract

Why did productivity rise during recent recessions? One possibility is that average worker quality increased. A second is that each incumbent worker produced more. The second effect is termed “making do with less.” Using data from 2006 to 2010 on individual worker productivity from a large firm, these effects can be measured and separated. For this firm, most of the gain in productivity during the recession was a result of increased effort. Additionally, the increase in effort is correlated with the increase in the local unemployment rate, presumably reflecting the costs of losing a job.

Suggested Citation

Lazear, Edward P. and Shaw, Kathryn L. and Stanton, Christopher, Making Do with Less: Working Harder During Recessions (June 5, 2014). Stanford University Graduate School of Business Research Paper No. 14-16. Available at SSRN: https://ssrn.com/abstract=2306810 or http://dx.doi.org/10.2139/ssrn.2306810

Edward P. Lazear

Stanford Graduate School of Business ( email )

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National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

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Kathryn L. Shaw

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

National Bureau of Economic Research (NBER)

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Christopher Stanton (Contact Author)

National Bureau of Economic Research (NBER) ( email )

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London School of Economics & Political Science (LSE) ( email )

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University of Utah - Department of Finance ( email )

David Eccles School of Business
Salt Lake City, UT 84112
United States

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