Worker Flows, Entry and Productivity in the New Zealand Construction Industry

34 Pages Posted: 6 Mar 2018

See all articles by Nathan Chappell

Nathan Chappell

Motu Economic and Public Policy Research Trust

Adam B. Jaffe

Motu Economic and Public Policy Research; Brandeis University; National Bureau of Economic Research (NBER)

Trinh Le

Motu Economic and Public Policy Research Trust

Date Written: March 2018

Abstract

The 21st century global decline in productivity growth is not well understood. One possible contributor is a decline in economic dynamism. We explore the contribution of firm formation and employee movement to productivity using administrative data on the population of New Zealand construction firms from 2001-2012, along with linked data on their employees and working proprietors, to study the relationships among entry, worker flows and firm productivity. Entrants are more productive than pre-existing firms. Firms that enter and stay exhibit a persistent productivity advantage that averages about seven percent, but which grows as experience accumulates. We find that job churn is prevalent in construction, with around 60 percent of firm-worker pairs not existing previously or not existing subsequently. Firms with new employees are more productive than those with no change in workforce, in part because of knowledge flows from other construction firms. In our preferred specification, with firm fixed effects, a standard deviation increase in the productivity of new employees' previous firms is associated with a 0.6 percent increase in productivity. The entry and worker-knowledge-flow phenomena are distinct, in that the entry effect is not explained by employee composition, and non-entrant firms also benefit from worker knowledge flows.

Suggested Citation

Chappell, Nathan and Jaffe, Adam B. and Le, Trinh, Worker Flows, Entry and Productivity in the New Zealand Construction Industry (March 2018). NBER Working Paper No. w24376, Available at SSRN: https://ssrn.com/abstract=3134273

Nathan Chappell (Contact Author)

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Adam B. Jaffe

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

HOME PAGE: http://motu.org.nz

Brandeis University ( email )

Waltham, MA 02454-9110
United States
781-736-2251 (Phone)
781-736-2263 (Fax)

HOME PAGE: http://www.brandeis.edu/global/people/faculty/jaff

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Trinh Le

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
2
Abstract Views
109
PlumX Metrics