Papers Containing Keywords(s): 'macroeconomic'
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Viewing papers 111 through 120 of 161
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Working PaperStability and Change in Individual Determinants of Migration: Evidence from 1985-1990 and 1995 to 2000
November 2006
Working Paper Number:
CES-06-27
In this paper, we compare the reliability of migration estimates from two rather different macroeconomic periods in recent U.S. history. One of these periods, 1985-1990 coincides with the culmination of a vast industrial restructuring which saw a significant decline in manufacturing employment. The other period, 1995-2000, encompasses a time of robust economic growth and tight labor markets driven by productivity gains associated with new technologies. Our interest here is in the stability of common individual-level predictors of migration in these rather disparate macroeconomic contexts. Using confidential internal versions of the 1990 and 2000 Census long-form data, we estimate logistic models of the likelihood that individuals will migrate. The geographic detail in the internal Census data permits us to measure migration in ways that are not possible with public-domain Census data on persons. We develop migration definitions that distinguish between local residential mobility likely associated with life course transitions from migration out of the labor market area that may be driven more by employment and other socioeconomic considerations. Using logistic modeling, we find that the same individual attributes predict migration reasonably well during both periods. We also compute some illustrative probabilities of migration that show temporal stability in migration predictors could be lessened by certain changes in population composition.View Full Paper PDF
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Working PaperExplaining Cyclical Movements in Employment: Creative-Destruction or Changes in Utilization?
November 2006
Working Paper Number:
CES-06-25
An important step in understanding why employment fluctuates cyclically is determining the relative importance of cyclical movements in permanent and temporary plant-level employment changes. If movements in permanent employment changes are important, then recessions are times when the destruction of job specific capital picks up and/or investment in new job capital slows. If movements in temporary employment changes are important, then employment fluctuations are related to the temporary movement of workers across activities (e.g. from work to home production or search and back again) as the relative costs/benefits of these activities change. I estimate that in the manufacturing sector temporary employment changes account for approximately 60 percent of the change in employment growth over the cycle. However, if permanent employment changes create and destroy more capital than temporary employment changes, then their economic consequences would be relatively greater. The correlation between gross permanent employment changes and capital intensity across industries supports the hypothesis that permanent employment changes do create and destroy more capital than temporary employment changes.View Full Paper PDF
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Working PaperWhy Are Plant Deaths Countercyclical: Reallocation Timing or Fragility?
November 2006
Working Paper Number:
CES-06-24
Because plant deaths destroy specific capital with large local economic impacts and potentially important macroeconmic effects, understanding the causes of deaths and, in particular, why they are concentrated in cyclical downturns, is important. The reallocationtiming hypothesis posits that plants suffering adverse permanent demand/productivity shocks delay shutdowns until cyclical downturns when plant capacity is less valuable, while the fragility hypothesis posits that shutdowns occur in downturns because the option value of maintaining the plant through low profitability periods is too small. I show that the effect that a plant's specific capital has on the timing of plant deaths differs across these two hypotheses and then use this insight to test the hypotheses' relative importance. I find that fragility is the dominant cause of the countercyclical behavior of plant deaths. This suggests that the endogenous destruction of capital is likely an important amplification and propagation mechanism for cyclical shocks and that stabilization policies have the benefit of reduced capital destruction.View Full Paper PDF
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Working PaperThe Dynamics of Plant-Level Productivity in U.S. Manufacturing
July 2006
Working Paper Number:
CES-06-20
Using a unique database that covers the entire U.S. manufacturing sector from 1976 until 1999, we estimate plant-level total factor productivity for a large number of plants. We characterize time series properties of plant-level idiosyncratic shocks to productivity, taking into account aggregate manufacturing-sector shocks and industry-level shocks. Plant-level heterogeneity and shocks are a key determinant of the cross-sectional variations in output. We compare the persistence and volatility of the idiosyncratic plant-level shocks to those of aggregate productivity shocks estimated from aggregate data. We find that the persistence of plant level shocks is surprisingly low-we estimate an average autocorrelation of the plantspecific productivity shock of only 0.37 to 0.41 on an annual basis. Finally, we find that estimates of the persistence of productivity shocks from aggregate data have a large upward bias. Estimates of the persistence of productivity shocks in the same data aggregated to the industry level produce autocorrelation estimates ranging from 0.80 to 0.91 on an annual basis. The results are robust to the inclusion of various measures of lumpiness in investment and job flows, different weighting methods, and different measures of the plants' capital stocks.View Full Paper PDF
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Working PaperVolatility and Dispersion in Business Growth Rates: Publicly Traded Versus Privately Held Firms
July 2006
Working Paper Number:
CES-06-17
We study the variability of business growth rates in the U.S. private sector from 1976 onwards. To carry out our study, we exploit the recently developed Longitudinal Business Database (LBD), which contains annual observations on employment and payroll for all U.S. businesses. Our central finding is a large secular decline in the cross sectional dispersion of firm growth rates and in the average magnitude of firm level volatility. Measured the same way as in other recent research, the employment-weighted mean volatility of firm growth rates has declined by more than 40% since 1982. This result stands in sharp contrast to previous findings of rising volatility for publicly traded firms in COMPUSTAT data. We confirm the rise in volatility among publicly traded firms using the LBD, but we show that its impact is overwhelmed by declining volatility among privately held firms. This pattern holds in every major industry group. Employment shifts toward older businesses account for 27 percent or more of the volatility decline among privately held firms. Simple cohort effects that capture higher volatility among more recently listed firms account for most of the volatility rise among publicly traded firms.View Full Paper PDF
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Working PaperDownsizing, Layoffs and Plant Closure: The Impacts of Import Price Pressure and Technological Growth on U.S. Textile Producers
April 2006
Working Paper Number:
CES-06-10
Downsizing, layoffs and plant closure are three plant-level responses to adverse economic conditions. I provide a theoretical and empirical analysis that illustrates the sources of each phenomenon and the implications for production and employment in the textiles industry. I consider two potential causes of these phenomena: technological progress and increased import competition. I create a micro-founded model of plant-level decision-making and combine it with conditions for dynamic market equilibrium. Through use of detailed plant-level information available in the US Census of Manufacturers and the Annual Survey of Manufacturers for the period 1982-2001, along with price data on imports, I examine the relative contribution of technology and import competition to the decline in output, employment and number of plants in textiles production in the US in recent years. The market-clearing domestic price of textiles is identified as a crucial channel in transmitting technology or import price shocks to downsizing, layoffs and plant closure. The model is estimated on two 4-digit sectors of textiles production (SIC 2211, broadwoven cotton and SIC 2221, broadwoven man-made fiber). The results validate modeling the production sectors as monopolistically competitive, and the elasticity of substitution between foreign and domestic varieties is found to be quite high. The coefficients on the productive technology are sensible, as are the estimated parameters of the plant exit, entry and investment decision rules. In simulations for the broadwoven cotton industry, the effects of technological progress are shown to have a much larger impact on layoffs than on plant closure, with plant size as measured by output actually increasing. Falling foreign prices lead to greater relative magnitudes of plant closure than of downsizing or layoffs.View Full Paper PDF
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Working PaperImport Price Pressure on Firm Productivity and Employment: The Case of U.S. Textiles
March 2006
Working Paper Number:
CES-06-09
Theoretical research has predicted three different effects of increased import competition on plant-level behavior: reduced domestic production and sales, improving average efficiency of plants, and increased exit of marginal firms. In empirical work, though, such effects are difficult to separate from the impact of exogenous technological progress (or regress). I use detailed plant-level information available in the US Census of Manufacturers and the Annual Survey of Manufacturers for the period 1983-2000 to decompose these effects. I derive the relative contribution of technology and import competition to the increase in productivity and the decline in employment in textiles production in the US in recent years. I then simulate the impact of removal of quota protection on the scale of operation of the average plant and the incentive to plant closure. The methodology employs a number of important innovations in examining the impact of falling import prices on the domestic production of an import-competing good. First, import competition is modeled directly through its impact on the relative prices of monopolistically competitive goods along the lines suggested by Melitz (2000). Second, the effect of technology is incorporated through structural estimation of plant-level production functions in four factors (capital, labor, energy and materials). Solutions to econometric difficulties related to missing capital data and unobserved productivity are incorporated into the estimation technique. The model is estimated for plants with primary product in SIC 2211 (broadwoven cotton cloth). Results validate modeling demand as for differentiated products. Technological coefficients are sensible, with exogenous technological progress playing a large role. In the simulations run, the effects of foreign price competition are orders of magnitude higher than those of technological progress for the period after quotas on imports are removed. The large-scale reduction in employment and output in the US is shown to be a combination of reduced employment and output at plants in continuous operation and of plant closures that exceed new entries.View Full Paper PDF
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Working PaperPlant Turnover and Demand Fluctuations in the Ready-Mix Concrete Industry
March 2006
Working Paper Number:
CES-06-08
Fluctuations in demand cause some plants to exit a market and other to enter. Would eliminating these 'uctuations reduce plant turnover? A structural model of entry and exit in concentrated markets is estimated for the ready-mix concrete industry, using plant level data from the U.S. Census. The Nested Pseudo-Likelihood algorithm is used to 'nd parameters which rationalize behavior of 'rms involved in repeated competition. Due to high sunk costs, turnover rates would only be reduced by 3% by eliminating demand 'uctuations at the county level, saving around 20 million dollars a year in scrapped capital. However, demand 'uctuations blunt 'rms'incentive to invest, reducing the number of large plants by more than 50%.View Full Paper PDF
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Working PaperFactor Price Equality and the Economies of the United States
October 2005
Working Paper Number:
CES-05-21
We develop a methodology for identifying departures from relative factor price equality across regions that is valid under general assumptions about production, markets and factors. Application of this methodology to the United States reveals substantial and increasing deviations in relative skilled wages across labor markets in both 1972 and 1992 . These deviations vary systematically with labor markets' industry structure both in cross section and over time.View Full Paper PDF
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Working PaperImporters, Exporters, and Multinationals: A Portrait of Firms in the U.S. that Trade Goods
October 2005
Working Paper Number:
CES-05-20
This paper provides an integrated view of globally engaged U.S. firms by exploring a newly developed dataset that links U.S. international trade transactions to longitudinal data on U.S. enterprises. These data permit examination of a number of new dimensions of firm activity, including how many products firms trade, how many countries firms trade with, the characteristics of those countries, the concentration of trade across firms, whether firms transact at arms length or with related parties, and whether firms import as well as export. Firms that trade goods play an important role in the U.S., employing more than a third of the U.S. workforce. We find that the most globally engaged U.S. firms, i.e. those that both export to and import from related parties, dominate U.S. trade flows and employment at trading firms. We also find that firms that begin trading between 1993 and 2000 experience especially rapid employment growth and are a major force in overall job creation.View Full Paper PDF
