Productivity growth over the business cycle: cleansing effects of recessions
Small Business Economics
; 60(2):639-657, 2023.
Artículo
en Inglés
| ProQuest Central | ID: covidwho-2285113
ABSTRACT
This paper investigates the impact of recent recessions on the origins of productivity growth. We show how business cycles affect productivity growth, with particular attention for the impact of job reallocation and labor hoarding. We find evidence that recessions induce productivity enhancing job reallocation in manufacturing but not in services industries and show that labor hoarding mitigates this cleansing effect of recessions. Furthermore, we show how entry and exit of firms and industry dynamics shape the evolution of aggregate productivity.Plain English SummaryDuring recessions, governments support firms via temporary unemployment programs to save jobs. A side effect is that job reallocation and exit of low-productive firms can be distorted, while such cleansing effects typically spur productivity growth. This paper investigates how recessions affect productivity growth, with particular attention for the impact of job reallocation and labor hoarding. We find evidence that recessions induce productivity enhancing job reallocation in manufacturing but not in services industries and show that labor hoarding mitigates this cleansing effect of recessions. Furthermore, we show how entry and exit of firms and industry dynamics shape the evolution of aggregate productivity. As many developed economies struggle with a slowdown in productivity growth, it is important that policy makers understand the impact of recessions on the micro origins of productivity growth and are aware of how temporary policies during recessions could affect long-term productivity growth.
Texto completo:
Disponible
Colección:
Bases de datos de organismos internacionales
Base de datos:
ProQuest Central
Tipo de estudio:
Estudio experimental
Idioma:
Inglés
Revista:
Small Business Economics
Año:
2023
Tipo del documento:
Artículo
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