Search Results
Working Paper
Firm specific human capital vs. job matching: a new test
We use a unique data set on employee turnover by industry in Arizona to test competing theories of turnover. We find that industries with lower establishment survival rates have more employee turnover, even after controlling for differences in the distribution of employee tenure. This result is consistent with a model of turnover where employees choose how much firm specific human capital to accumulate, but it is inconsistent with job matching models.
Working Paper
Growing old together: firm survival and employee turnover
Labor market outcomes such as turnover and earnings are correlated with employer characteristics, even after controlling for observable differences in worker characteristics. We argue that this systematic relationship constitutes strong evidence in favor of models where workers choose how much to invest in future productivity. Because employer characteristics are correlated with firm survival, returns to these investments vary across firm types. We describe a dynamic general equilibrium model where workers employed in firms more likely to survive choose to devote more time to productivity ...
Discussion Paper
Measuring Early-Stage Business Formation
New businesses play an important role in overall economic activity. They account for a sizable share of job creation, and they provide a key source of innovation that contributes to overall productivity growth.
Working Paper
An alternative theory of the plant size distribution with an application to trade
There is wide variation in the sizes of manufacturing plants, even within the most narrowly defined industry classifications used by statistical agencies. Standard theories attribute all such size differences to productivity differences. This paper develops an alternative theory in which industries are made up of large plants producing standardized goods and small plants making custom or specialty goods. It uses confidential Census data to estimate the parameters of the model, including estimates of plant counts in the standardized and specialty segments by industry. The estimated model fits ...
Working Paper
The home market and the pattern of trade: round three
Does national market size matter for industrial structure? Round One (Krugman) answered in the affirmative: Home market effects matter. Round Two (Davis) refuted this, arguing that an assumption of convenience--transport costs only for the differentiated goods--conveniently obtained the result. In Round Three we relax another persistent assumption of convenience--industry types differentiated only by the degree of scale economies--and find that market size reemerges as a relevant force in determining industrial structure.
Working Paper
Raising the bar for models of turnover
It is well known that turnover rates fall with employee tenure and employer size. We document a new empirical fact about turnover: Among surviving employers, separation rates are positively related to industry-level exit rates, even after controlling for tenure and size. Specifically, in a dataset with over 13 million matched employee-employer observations for France, we find that, all else equal, a 1 percentage point increase in exit rates raises separation rates by 1/2 percentage point on average. Among current year hires, the average effect is twice as large. This relationship between exit ...
Working Paper
Geographic concentration and establishment size: analysis in an alternative economic geography model
Big cities specialize in services rather than manufacturing. Big-city establishments in services are larger than the national average while those in manufacturing are smaller. This paper proposes an explanation of these and other facts. The theory is developed in an economic geography model that is an alternative to the standard Dixit-Stiglitz structure. In our tractable structure that has potentially wider application, firms have monopoly power in local markets, but are price takers in export markets.
Report
Do long-haul truckers undervalue future fuel savings?
The U.S. federal government enacted fuel efficiency standards for medium and heavy trucks for the first time in September 2011. Rationales for using this policy tool typically depend upon frictions existing in the marketplace or consumers being myopic, such that vehicle purchasers undervalue the future fuel savings from increased fuel efficiency. We measure by how much long-haul truck owners undervalue future fuel savings by employing recent advances to the classic hedonic approach to estimate the distribution of willingness-to-pay for fuel efficiency. We find significant heterogeneity in ...
Working Paper
Estimating capacity utilization from survey data
In this paper, we review the history and concepts behind the Federal Reserve's measures of capacity and capacity utilization, summarize the methods used to construct the measures, and describe the principal source data for these measures--the Census Bureau's Survey of Plant Capacity. We show that the aggregate manufacturing utilization rate from the Survey of Plant Capacity does not exhibit the "cyclical bias" possessed by utilization rates from the less statistically rigorous utilization rate surveys previously used to estimate the Federal Reserve's measures. At the detailed industry ...
Report
An alternative theory of the plant size distribution with an application to trade
There is wide variation in the sizes of manufacturing plants, even within the most narrowly defined industry classifications used by statistical agencies. Standard theories attribute all such size differences to productivity differences. This paper develops an alternative theory in which industries are made up of large plants producing standardized goods and small plants making custom or specialty goods. It uses confidential Census data to estimate the parameters of the model, including estimates of plant counts in the standardized and specialty segments by industry. The estimated model fits ...