-
The Dynamics of Worker Reallocation Within and Across Industries
June 2005
Working Paper Number:
tp-2005-02
This paper uses an integrated employer-employee data set to answer two key questions:
1. What is the "equilibrium" amount of worker reallocation in the economy - both within and across industries?
2. How much does firm-level job reallocation affect the separation probabilities of workers?
Consistent with other work, we find that there is a great deal of reallocation in the economy,
although this varies substantially across demographic group. Much worker reallocation is
within the economy, roughly evenly split between within and across broadly defined
industries. An important new finding is that much of this reallocation is confined to a
relatively small subset of workers that is shuffled across jobs - both within and across
industries - in the economy. However, we also find that even for the most stable group of
workers, firm level job reallocation substantially increases the probability of transition for
even the most stable group of workers. Finally, workers who are employed in industries that
provide low returns to tenure are much more likely to reallocate both within and across
industries.
View Full
Paper PDF
-
A Change of PACE: Comparing the 1994 and 1999 Pollution Abatement Costs and Expenditures Surveys
July 2004
Working Paper Number:
CES-04-09
Since 1973, the Pollution Abatement Costs and Expenditures (PACE) survey has been the principle source of information on U.S. industries' capital expenditure and operating costs associated with pollution abatement efforts. The PACE survey was discontinued after 1994 and then revived in 1999 for one year ' in a substantially different form than the preceding surveys however, making longitudinal analysis quite difficult. Conceptual differences include matters as fundamental as the scope and meaning of pollution abatement as well as the definition of operating costs. A number of other critical changes also exist, including ones of industrial coverage and sample selection. This paper is the first comprehensive effort to document the many changes in the PACE survey across these years and to provide a detailed guide for researchers and policymakers who wish to compare the 1994 and 1999 data. Overall, we find a 27% decline in environmental spending by the manufacturing sector between these two years, though there appears to be significant heterogeneity across industries. We discuss potential reasons for this dramatic decline, focusing mainly on issues of survey methodology and design. This paper should help inform current efforts to redevelop the PACE survey and re-establish it as a regular, annual survey.
View Full
Paper PDF
-
Regional Income Inequality and International Trade
July 2003
Working Paper Number:
CES-03-15
International trade is frequently cited as a cause of rising income inequality between individuals and across countries. Less attention has been paid to the effects of trade on inequality across regions within countries. Trade may enhance regional inequalities due to differences in regional trade involvement and in the prices of export and import-competing goods produced in different regions. This study investigates the effects of trade on income inequality across regions in the United States. Using both structural and price-based measures of regional trade involvement, we evaluate the effects of trade on inequality within and across states, the metro and nonmetro portions of the states, and the major Census regions. Across all states and across metro and nonmetro areas, we find that trade affects inequality primarily via import and export prices. In contrast to our expectations, however, a weaker dollar '''more expensive imports and cheaper exports ''' is associated with a worsening of a state'''s position relative to other states, and greater inequality within a state. Across the Census regions, both our price and measures had significant effects, but the direction of these effects varied by region. Whereas most regions benefited from cheaper imports, states located in regions that are traditionally home to low-wage sectors, including the Southeast and South Central regions, were made relatively worse off by lower import prices and by greater orientation toward import-competing goods. Our findings reinforce notions about the uneven impacts of globalization and suggest that policy measures are needed to ensure that both the benefits and costs of international trade involvement are shared across regions.
View Full
Paper PDF
-
The Survival of Industrial Plants
October 2002
Working Paper Number:
CES-02-25
The study seeks to explain the attrition rate of new manufacturing plants in the United States in terms of three vectors of variables. The first explains how survival of the fittest proceeds through learning by firms (plants) about their own relative efficiency. The second explains how efficiency systematically changes over time and what augments or diminishes it. The third captures the opportunity cost of resources employed in a plant. The model is tested using maximum-likelihood probit analysis with very large samples for successive census years in the 1967-97 period. One sample consists of an unbalanced panel of about three-fourths of a million plants of single and multi-unit firms, or alternatively of about 300,000 plants if only the most reliable data are considered. The second is restricted to the plants of multi-unit firms in the same time span and consists of an unbalanced panel of more than 100,000 plants. The empirical analysis strongly confirms the predictions of the model.
View Full
Paper PDF
-
Survival of the Best Fit: Competition from Low Wage Countries and the (Uneven) Growth of U.S. Manufacturing Plants
October 2002
Working Paper Number:
CES-02-22
We examine the relationship between import competition from low wage countries and the reallocation of US manufacturing from 1977 to 1997. Both employment and output growth are slower for plants that face higher levels of low wage import competition in their industry. As a result, US manufacturing is reallocated over time towards industries that are more capital and skill intensive. Differential growth is driven by a combination of increased plant failure rates and slower growth of surviving plants. Within industries, low wage import competition has the strongest effects on the least capital and skill intensive plants. Surviving plants that switch industries move into more capital and skill intensive sectors when they face low wage competition.
View Full
Paper PDF
-
The Longitudinal Business Database
July 2002
Working Paper Number:
CES-02-17
As the largest federal statistical agency and primary collector of data on businesses, households and individuals, the Census Bureau each year conducts numerous surveys intended to provide statistics on a wide range of topics about the population and economy of the United States. The Census Bureau's decennial population and quinquennial economic censuses are unique, providing information on all U.S. households and business establishments, respectively.
View Full
Paper PDF
-
The Trend to Smaller Producers in Manufacturing in Canada and the U.S.
March 2002
Working Paper Number:
CES-02-06
This paper examines the trend in the importance of small producers in the Canadian and U.S. manufacturing sectors from the early 1970s to the late 1990s in order to investigate whether there was a common North American trend in changes in plant size. It finds that small plants in both countries increased their share of employment up to the 1990s, but their share remained stable in the 1990s. Small plants increased their share of output up to the 1990s, but then saw their share of output decline. Over the entire time period, their share of output increased less than their share of employment and, therefore, their relative labour productivity has fallen. The similarity in the trends in the two countries suggests that causes of this phenomenon should be sought in similarities such as the technological environment rather than in country-specific factors like unionization or trade intensities.
View Full
Paper PDF
-
The Demand for Human Capital: A Microeconomic Approach
December 2001
Working Paper Number:
CES-01-16
We propose a model for explaining the demand for human capital based on a CES production function with human capital as an explicit argument in the function. The resulting factor demand model is tested with data on roughly 6,000 plants from the Census Bureau's Longitudinal Research Database. The results show strong complementarity between physical and human capital. Moreover, the complementarity is greater in high than in low technology industries. The results also show that physical capital of more recent vintage is associated with a higher demand for human capital. While the age of a plant as a reflection of learning-by-doing is positively related to the accumulation of human capital, this relation is more pronounced in low technology industries.
View Full
Paper PDF
-
Entry, Expansion, and Intensity in the U.S. Export Boom, 1987-1992
September 2001
Working Paper Number:
CES-01-09
U.S. exports grew at a rate of 10.3% per year from 1987-1992, far faster than the economy as a whole and faster than in any other five year period since 1960. This paper examines the sources of the export boom considering the role of entry, firm expansion and export intensity. The preponderance of the increase in exports came from increasing export intensity at existing exporters rather than from new entry into exporting. The small role of entry relative to export intensity offers support for the importance of sunk costs in the export market. In addition, we consider competing explanations for the rise in exports using a comprehensive plant level data set. Changes in exchange rates and rises in foreign income were the dominant sources for the export increase, while productivity increases in U.S. plants played a relatively small role.
View Full
Paper PDF
-
An Economist's Primer on Survey Samples
September 2000
Working Paper Number:
CES-00-15
Survey data underlie most empirical work in economics, yet economists typically have little familiarity with survey sample design and its effects on inference. This paper describes how sample designs depart from the simple random sampling model implicit in most econometrics textbooks, points out where the effects of this departure are likely to be greatest, and describes the relationship between design-based estimators developed by survey statisticians and related econometric methods for regression. Its intent is to provide empirical economists with enough background in survey methods to make informed use of design-based estimators. It emphasizes surveys of households (the source of most public-use files), but also considers how surveys of businesses differ. Examples from the National Longitudinal Survey of Youth of 1979 and the Current Population Survey illustrate practical aspects of design-based estimation.
View Full
Paper PDF
