Wage and Productivity Dispersion in U.S. Manufacturing: The Role of Computer Investment

47 Pages Posted: 24 Sep 2002

See all articles by Timothy Dunne

Timothy Dunne

Federal Reserve Bank of Cleveland

Lucia Foster

U.S. Census Bureau - Center for Economic Studies

John Haltiwanger

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

Kenneth R. Troske

University of Kentucky - Department of Economics; University of Missouri at Columbia - Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 2002

Abstract

By exploiting establishment-level data, this paper sheds new light on the sources of the changes in the structure of production, wages, and employment that have occurred over the last several decades. We investigate the following two related hypotheses. First, that most of the recent increase in the dispersion of wages and productivity has occurred across establishments and these changes are linked. Second, that the increased dispersion in wages and productivity across establishments is linked to differential rates of technological adoption across establishments. Our findings are largely supportive of these hypotheses. Specifically, we find that (1) the between-plant component of wage dispersion is an important and growing part of total wage dispersion; (2) much of the between plant increase in wage dispersion is within industries; (3) the between-plant measures of wage and productivity dispersion have increased substantially over the last few decades; and (4) a significant fraction of the rising dispersion in wages and (to a lesser extent) productivity is accounted for by changes in the distribution of computer investment across plants as well as changes in the wage and productivity differentials associated with the computer investment.

Keywords: Wages, Productivity, Dispersion

JEL Classification: J3, D3

Suggested Citation

Dunne, Timothy and Foster, Lucia and Haltiwanger, John C. and Troske, Kenneth R., Wage and Productivity Dispersion in U.S. Manufacturing: The Role of Computer Investment (August 2002). IZA Discussion Paper No. 563. Available at SSRN: https://ssrn.com/abstract=331065

Timothy Dunne

Federal Reserve Bank of Cleveland ( email )

PO Box 6387
Cleveland, OH 44101-1387
United States

Lucia Foster

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

4700 Silver Hill Road
Washington, DC 20233
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

Kenneth R. Troske (Contact Author)

University of Kentucky - Department of Economics ( email )

Lexington, KY 40506
United States

University of Missouri at Columbia - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States
573-882-4229 (Phone)
573-882-2697 (Fax)

IZA Institute of Labor Economics

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

Register to save articles to
your library

Register

Paper statistics

Downloads
142
Abstract Views
1,413
rank
162,681
PlumX Metrics