Dispersion in Dispersion: Measuring Establishment-Level Differences in Productivity

55 Pages Posted: 19 Jun 2021 Last revised: 29 Sep 2022

See all articles by Cindy Cunningham

Cindy Cunningham

U.S. Bureau of Labor Statistics

Lucia Foster

U.S. Census Bureau - Center for Economic Studies

Cheryl Grim

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)

Sabrina Wulff Pabilonia

U. S. Bureau of Labor Statistics - Division of Productivity Research & Program Development

Jay Stewart

Bureau of Labor Statistics; IZA Institute of Labor Economics

Zoltan Wolf

U.S. Census Bureau - Center for Economic Studies

Abstract

We describe new experimental productivity statistics, Dispersion Statistics on Productivity (DiSP), jointly developed and published by the Bureau of Labor Statistics (BLS) and the Census Bureau. Official BLS productivity statistics provide information on aggregate productivity growth. Yet, a large body of research shows that within-industry variation in productivity provides important insights into productivity dynamics. This research reveals large and persistent productivity differences across businesses, even within narrowly defined industries. These differences vary by industry and time and are related to productivityenhancing reallocation. Dispersion in productivity across businesses can provide information about the nature of competition and frictions within sectors, and about the sources of rising wage inequality across businesses. Because there were no official statistics providing this level of detail, BLS and the Census Bureau partnered to create measures of within-industry productivity dispersion. These measures complement official BLS aggregate industry-level productivity growth statistics and thereby improve our understanding of the rich productivity dynamics in the U.S. economy. The microdata underlying DiSP are available for use by qualified researchers on approved projects in the Federal Statistical Research Data Center network. DiSP confirms the presence of large productivity differences, and we hope that it will encourage further research into understanding these differences.

Keywords: reallocation, within-industry variation, establishments, business cycles, manufacturing

JEL Classification: D24, E24, E32

Suggested Citation

Cunningham, Cindy and Foster, Lucia and Grim, Cheryl and Haltiwanger, John C. and Pabilonia, Sabrina Wulff and Stewart, Jay and Wolf, Zoltan, Dispersion in Dispersion: Measuring Establishment-Level Differences in Productivity. IZA Discussion Paper No. 14459, Available at SSRN: https://ssrn.com/abstract=3870190

Cindy Cunningham (Contact Author)

U.S. Bureau of Labor Statistics

Behavioral Science Research Center
Washington, DC
United States

Lucia Foster

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

4700 Silver Hill Road
Washington, DC 20233
United States

Cheryl Grim

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

Suitland Federal Center
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

Sabrina Wulff Pabilonia

U. S. Bureau of Labor Statistics - Division of Productivity Research & Program Development ( email )

2 Massachusetts Avenue, NE
Washington, DC 20212
United States
202-691-5614 (Phone)

Jay Stewart

Bureau of Labor Statistics ( email )

2 Massachusetts Avenue, NE
Washington, DC 20212
United States

IZA Institute of Labor Economics

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

Zoltan Wolf

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

4700 Silver Hill Road
Washington, DC 20233
United States

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