Dispersion in Dispersion: Measuring Establishment‐Level Differences in Productivity

Abstract

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Opening the Black Box: Task and Skill Mix and Productivity Dispersion

“…It provides high-quality longitudinal links and information on the universe of manufacturing establishments. The CMP includes measures of inputs, output, and productivity (see Cunningham et al (2022)). The ASM establishments in the productivity database form the basis for creating the DiSP, which we describe below.…”

“…We use deflators at the highest level of industry detail available in BLS, BEA, and NBER-CES data. See Cunningham et al (2022) for more details on deflators and the construction of the DiSP. An important issue is how much observed revenue productivity dispersion reflects output and input price differences across establishments in the same narrow industry.…”

“…It is well known that productivity varies across establishments, even within detailed industries. For example, Cunningham et al (2022) found that on average an establishment at the 90 th percentile of the total factor productivity (TFP) distribution is about 2.9 times as productive as an establishment at the 10 th percentile within four-digit NAICS manufacturing industries. In a survey article, Syverson (2011) discusses several possible sources of productivity dispersion, including difficult-to-measure factors such as differences in managerial talent and differences in the quality of labor and other inputs.…”

“…Ideally, measurement of establishment-level productivity would also account for the types of workers the establishment employs and the tasks they perform. Our ultimate goal is to address this limitation by integrating establishment-level 1 See Cunningham et al (2022) for a detailed description of the development of the datasets. DiSP is available at: https://www.bls.gov/productivity/articles-and-research/dispersion-statistics-on-productivity/ and https://www.census.gov/disp.…”

“…Our productivity dispersion statistics come from the DiSP data (described in detail in Cunningham, et al (2022)). We create four types of measures of tasks and/or skills using OEWS and Occupational Information Network (O*NET) data.…”