Measuring Productivity Dispersion

Tinbergen Institute Discussion Paper 2017-033/VI

40 Pages Posted: 20 Mar 2017

See all articles by Eric J. Bartelsman

Eric J. Bartelsman

Vrije Universiteit Amsterdam; Tinbergen Institute; IZA Institute of Labor Economics

Zoltan Wolf

U.S. Census Bureau - Center for Economic Studies

Date Written: March 20, 2017


Measuring the dispersion of productivity or efficiency across firms in a market or industry is rife with methodological issues. Nevertheless, the existence of considerable dispersion now is well documented and widely accepted. Less well understood are the economic features and mechanisms underlying the magnitude of dispersion and how dispersion varies over time or across markets. On the one hand, selection mechanisms in both output and input markets should favor the most productive units through resource reallocation, thereby reducing dispersion. On the other hand, innovation and technological uncertainty tend to increase dispersion. This chapter presents a guide to measurement of dispersion and provides empirical evidence from a selection of countries and industries using a variety of methodologies.

Keywords: Productivity, Firm-level data, dispersion, volatility

JEL Classification: D2, O3

Suggested Citation

Bartelsman, Eric J. and Wolf, Zoltan, Measuring Productivity Dispersion (March 20, 2017). Tinbergen Institute Discussion Paper 2017-033/VI, Available at SSRN: or

Eric J. Bartelsman (Contact Author)

Vrije Universiteit Amsterdam ( email )

Amsterdam, ND North Holland
+31 (0)20 44 46044 (Phone)

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072

Zoltan Wolf

U.S. Census Bureau - Center for Economic Studies ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

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