TY  - JOUR
AU  - Baily,Martin Neil
AU  - Bartelsman,Eric J.
AU  - Haltiwanger,John
TI  - Downsizing and Productivity Growth: Myth or Reality?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4741
PY  - 1994
Y2  - May 1994
UR  - http://www.nber.org/papers/w4741
L1  - http://www.nber.org/papers/w4741.pdf
N1  - Author contact info:
Martin Neil Baily
8500 Freyman Drive
Chevey Chase, MD 20815
E-Mail: mbaily@brookings.edu

Eric Bartlesman
Vrije Universiteit Amsterdam
Tinbergen Institute
E-Mail: ebartelsman@alum.mit.edu

John C. Haltiwanger
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3504
Fax: 301/405-3542
E-Mail: haltiwan@econ.umd.edu
M2  - featured in NBER digest on 1994-07-01
AB  - The conventional wisdom is that the rising productivity in the U.S. manufacturing sector in the 1980s has been driven by the apparently pervasive downsizing over this period.  Aggregate evidence clearly shows falling employment accompanying the rise in productivity.  In this paper, we examine the microeconomic evidence using the plant level data from the Longitudinal Research Database (LRD).  In contrast to the conventional wisdom, we find that plants that increased employment as well as productivity contribute almost as much to overall productivity growth in the 1980s as the plants that increased productivity at the expense of employment.  Further, there are striking differences by sector (defined by industry, size, region, wages, and ownership type) in the allocation of plants in terms of whether they upsize or downsize and whether they increase or decrease productivity.  Nevertheless, in spite of the striking differences across sectors defined in a variety of ways, most of the variance of productivity and employment growth is accounted for by idiosyncratic factors.
ER  -