Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown

14 Pages Posted: 24 Feb 2017

See all articles by Ryan Decker

Ryan Decker

Board of Governors of the Federal Reserve System

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Ron S. Jarmin

U.S. Census Bureau

Javier Miranda

U.S. Census Bureau - Center for Administrative Records Research and Applications

Multiple version iconThere are 2 versions of this paper

Date Written: 2017-02-07

Abstract

A large literature documents declining measures of business dynamism including high-growth young firm activity and job reallocation. A distinct literature describes a slowdown in the pace of aggregate labor productivity growth. We relate these patterns by studying changes in productivity growth from the late 1990s to the mid 2000s using firm-level data. We find that diminished allocative efficiency gains can account for the productivity slowdown in a manner that interacts with the within-firm productivity growth distribution. The evidence suggests that the decline in dynamism is reason for concern and sheds light on debates about the causes of slowing productivity growth.

Keywords: Job reallocation, Labor supply and demand, Productivity

JEL Classification: O47, L11, E24, J63

Suggested Citation

Decker, Ryan and Haltiwanger, John C. and Jarmin, Ron S. and Miranda, Javier, Declining Dynamism, Allocative Efficiency, and the Productivity Slowdown (2017-02-07). FEDS Working Paper No. 2017-019. Available at SSRN: https://ssrn.com/abstract=2922380 or http://dx.doi.org/10.17016/FEDS.2017.019

Ryan Decker (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

John C. Haltiwanger

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Ron S. Jarmin

U.S. Census Bureau ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Javier Miranda

U.S. Census Bureau - Center for Administrative Records Research and Applications ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
114
rank
182,852
Abstract Views
685
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information