TY  - JOUR
AU  - Decker, Ryan A
AU  - Haltiwanger, John C
AU  - Jarmin, Ron S
AU  - Miranda, Javier
TI  - Changing Business Dynamism and Productivity:  Shocks vs. Responsiveness
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 24236
PY  - 2018
Y2  - January 2018
DO  - 10.3386/w24236
UR  - http://www.nber.org/papers/w24236
L1  - http://www.nber.org/papers/w24236.pdf
N1  - Author contact info:
Ryan A. Decker
Federal Reserve Board
20th Street and C Street, NW
Washington, DC  20551
Tel: 202-452-2478
E-Mail: ryan.a.decker@frb.gov

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

Ron S. Jarmin
U.S. Census Bureau
4600 Silver Hill Road
Washington, DC 20233
Tel: 301.763.1858
E-Mail: ron.s.jarmin@census.gov

Javier Miranda
U.S. Bureau of the Census
Economy-Wide Statistics Division
4600 Silver Hill Road
Washington, DC 20233
Tel: 301-763-6466
E-Mail: javier.miranda@census.gov
AB  - The pace of job reallocation has declined in all U.S. sectors since 2000.  In standard models, aggregate job reallocation depends on (a) the dispersion of idiosyncratic productivity shocks faced by businesses and (b) the marginal responsiveness of businesses to those shocks.  Using several novel empirical facts from business microdata, we infer that the pervasive post-2000 decline in reallocation reflects weaker responsiveness in a manner consistent with rising adjustment frictions and not lower dispersion of shocks.  The within-industry dispersion of TFP and output per worker has risen, while the marginal responsiveness of employment growth to business-level productivity has weakened.  The responsiveness in the post-2000 period for young firms in the high-tech sector is only about half (in manufacturing) to two thirds (economy wide) of the peak in the 1990s.  Counterfactuals show that weakening productivity responsiveness since 2000 accounts for a significant drag on aggregate productivity.
ER  -