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Addressing Data Gaps:
Four New Lines of Inquiry in the 2017 Economic Census
September 2019
Working Paper Number:
CES-19-28
We describe four new lines of inquiry added to the 2017 Economic Census regarding (i) retail health clinics, (ii) management practices in health care services, (iii) self-service in retail and service industries, and (iv) water use in manufacturing and mining industries. These were proposed by economists from the U.S. Census Bureau's Center for Economic Studies in order to fill data gaps in current Census Bureau products concerning the U.S. economy. The new content addresses such issues as the rise in importance of health care and its complexity, the adoption of automation technologies, and the importance of measuring water, a critical input to many manufacturing and mining industries.
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Re-engineering Key National Economic Indicators
July 2019
Working Paper Number:
CES-19-22
Traditional methods of collecting data from businesses and households face increasing challenges. These include declining response rates to surveys, increasing costs to traditional modes of data collection, and the difficulty of keeping pace with rapid changes in the economy. The digitization of virtually all market transactions offers the potential for re-engineering key national economic indicators. The challenge for the statistical system is how to operate in this data-rich environment. This paper focuses on the opportunities for collecting item-level data at the source and constructing key indicators using measurement methods consistent with such a data infrastructure. Ubiquitous digitization of transactions allows price and quantity be collected or aggregated simultaneously at the source. This new architecture for economic statistics creates challenges arising from the rapid change in items sold. The paper explores some recently proposed techniques for estimating price and quantity indices in large scale item-level data. Although those methods display tremendous promise, substantially more research is necessary before they will be ready to serve as the basis for the official economic statistics. Finally, the paper addresses implications for building national statistics from transactions for data collection and for the capabilities and organization of the statistical agencies in the 21st century.
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MANAGING TRADE: EVIDENCE FROM CHINA AND THE US
May 2019
Working Paper Number:
CES-19-15
We present a heterogeneous-firm model in which management ability increases both production efficiency and product quality. Combining six micro-datasets on management practices, production and trade in Chinese and American firms, we find broad support for the model's predictions. First, better managed firms are more likely to export, sell more products to more destination countries, and earn higher export revenues and profits. Second, better managed exporters have higher prices, higher quality, and lower quality-adjusted prices. Finally, they also use a wider range of inputs, higher quality and more expensive inputs, and imported inputs from more advanced countries. The structural estimates indicate that management is important for improving production efficiency and product quality in both countries, but it matters more in China than in the US, especially for product quality. Panel analysis for the US and a randomized control trial in India suggest that management exerts causal effects on product quality, production efficiency, and exports. Poor management practices may thus hinder trade and growth, especially in developing countries.
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Growing Oligopolies, Prices, Output, and Productivity
November 2018
Working Paper Number:
CES-18-48
American industries have grown more concentrated over the last forty years. In the absence of productivity innovation, this should lead to price hikes and output reductions, decreasing consumer welfare. Using public data from 1972-2012, I use price data to disentangle revenue from output. Difference-in-difference estimates show that industry concentration increases are positively correlated to productivity and real output growth, uncorrelated with price changes and overall payroll, and negatively correlated with labor's revenue share. I rationalize these results in a simple model of competition. Productive industries (with growing oligopolists) expand real output and hold down prices, raising consumer welfare, while maintaining or reducing their workforces, lowering labor's share of output.
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Development of Survey Questions on Robotics Expenditures and Use in U.S. Manufacturing Establishments
October 2018
Working Paper Number:
CES-18-44
The U.S. Census Bureau in partnership with a team of external researchers developed a series of questions on the use of robotics in U.S. manufacturing establishments. The questions include: (1) capital expenditures for new and used industrial robotic equipment in 2018, (2) number of industrial robots in operation in 2018, and (3) number of industrial robots purchased in 2018. These questions are to be included in the 2018 Annual Survey of Manufactures. This paper documents the background and cognitive testing process used for the development of these questions.
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The Great Recession and a Missing Generation of Exporters
August 2018
Working Paper Number:
CES-18-33
The collapse of international trade surrounding the Great Recession has garnered significant attention. This paper studies firm entry and exit in foreign markets and their role in the post-recession recovery of U.S. exports using confidential microdata from the U.S. Census Bureau. We find that incumbent exporters account for the vast majority of the decline in export volumes during the crisis. The recession also induced a missing generation of exporters, with large increases in exits and a substantial decline in entries into foreign markets. New exporters during these years tended to have larger export volumes, however, compensating for the decline in the number of exporting firms. Thus, while entry and exit were important for determining the variety of U.S. goods that were exported, they were less important for the trajectory of aggregate foreign sales.
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Older and Slower: The Startup Deficit's Lasting Effects on Aggregate Productivity Growth
June 2018
Working Paper Number:
CES-18-29
We investigate the link between declining firm entry, aging incumbent firms and sluggish U.S. productivity growth. We provide a dynamic decomposition framework to characterize the contributions to industry productivity growth across the firm age distribution and apply this framework to the newly developed Revenue-enhanced Longitudinal Business Database (ReLBD). Overall, several key findings emerge: (i) the relationship between firm age and productivity growth is downward sloping and convex; (ii) the magnitudes are substantial and significant but fade quickly, with nearly 2/3 of the effect disappearing after five years and nearly the entire effect disappearing after ten; (iii) the higher productivity growth of young firms is driven nearly exclusively by the forces of selection and reallocation. Our results suggest a cumulative drag on aggregate productivity of 3.1% since 1980. Using an instrumental variables strategy we find a consistent pattern across states/MSAs in the U.S. The patterns are broadly consistent with a standard model of firm dynamics with monopolistic competition.
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Dispersion in Dispersion: Measuring Establishment-Level Differences in Productivity
April 2018
Working Paper Number:
CES-18-25RR
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. Productivity measures are critical for understanding economic performance. Official BLS productivity statistics, which are available for major sectors and detailed industries, provide information on the sources of aggregate productivity growth. 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 across industries and over time and are related to productivity-enhancing 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 and industry-level productivity growth statistics and thereby improve our understanding of the rich productivity dynamics in the U.S. economy. The underlying microdata for these measures are available for use by qualified researchers on approved projects in the Federal Statistical Research Data Center (FSRDC) network. These new statistics confirm the presence of large productivity differences and we hope that these new data products will encourage further research into understanding these differences.
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Missing Growth from Creative Destruction
April 2018
Working Paper Number:
CES-18-18
Statistical agencies typically impute inflation for disappearing products based on surviving products, which may result in overstated inflation and understated growth. Using U.S. Census data, we apply two ways of assessing the magnitude of 'missing growth' for private nonfarm businesses from 1983'2013. The first approach exploits information on the market share of surviving plants. The second approach applies indirect inference to firm-level data. We find: (i) missing growth from imputation is substantial ' at least 0.6 percentage points per year; and (ii) most of the missing growth is due to creative destruction (as opposed to new varieties).
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New Perspectives on the Decline of U.S.
Manufacturing Employment
April 2018
Working Paper Number:
CES-18-17
We use relatively unexplored dimensions of US microdata to examine how US manufacturing employment has evolved across industries, rms, establishments, and regions. We show that these data provide support for both trade- and technology-based explanations of the overall decline of employment over this period, while also highlighting the di-culties of estimating an overall contribution for each mechanism. Toward that end, we discuss how further analysis of these trends might yield sharper insights.
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