Template-Type: ReDIF-Paper 1.0
Author-Name: Alicia Robb
Author-Name: Robert Fairlie
Title: Access to Financial Capital Among U.S. Businesses: The Case of African-American Firms
Abstract: The differences between African-American business ownership rates and white business ownership rates are striking. Estimates from the 2000 Census indicate that 11.8 percent of white workers are self-employed business owners, compared with only 4.8 percent of black workers. Furthermore, black-white differences in business ownership rates have remained roughly constant over most of the twentieth century (Fairlie and Meyer 2000). In addition to lower rates of business ownership, black-owned businesses are less successful on average than are white or Asian firms. In particular, black-owned businesses have lower sales, hire fewer employees and have smaller payrolls than white- or Asian-owned businesses, on average (U.S. Census Bureau 2001, U.S. Small Business Administration 2001). Black firms also have lower profits and higher closure rates than white firms (U.S. Census Bureau 1997, U.S. Small Business Administration 1999). For most outcomes, the disparities are extremely large. For example, estimates from the 2002 Survey of Business Owners (SBO) indicate that white firms have average sales of $437,870 compared with only $74,018 for black firms.
Length: 37 pages
Creation-Date: 2006-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101775
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:06-33
 
Template-Type: ReDIF-Paper 1.0
Author-Name: Alicia Robb
Author-Name: Robert Fairlie
Title: Determinants of Business Success: An Examination of Asian-Owned Businesses in the United States
Abstract: Using confidential and restricted-access microdata from the U.S. Census Bureau, we find that Asian-owned businesses are 16.9 percent less likely to close, 20.6 percent more likely to have profits of at least $10,000, and 27.2 percent more likely to hire employees than whiteowned businesses in the United States. Asian firms also have mean annual sales that are roughly 60 percent higher than the mean sales of white firms. Using regression estimates and a special non-linear decomposition technique, we explore the role that class resources, such as financial capital and human capital, play in contributing to the relative success of Asian businesses. We find that Asian-owned businesses are more successful than white-owned businesses for two main reasons . Asian owners have high levels of human capital and their businesses have substantial startup capital. Startup capital and education alone explain from 65 percent to the entire gap in business outcomes between Asians and whites. Using the detailed information on both the owner and the firm available in the CBO, we estimate the explanatory power of several additional factors.
Length: 58 pages
Creation-Date: 2006-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101774
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:06-32

Template-Type: ReDIF-Paper 1.0
Author-Name: David Bryce
Author-Name: Sidney Winter
Title: A General Inter-Industry Relatedness Index
Abstract: Firm growth and expansion is widely believed to be guided by the desire to leverage existing resources. But which resources? The answer depends largely on context.the peculiarities of industries, firms, technologies, production, customers, and a host of other dimensions. This fact makes pointing to any particular set of resources as the source of expansion decisions potentially problematic and makes more difficult tests of theories such as the resource-based view of the firm. This paper tackles the problem by developing a general inter-industry relatedness index that can be usefully applied across industry and firm contexts. The index harnesses the relatedness information embedded in the multi-product organization and diversification decisions of every firm in the US manufacturing economy. The index is general in that it implicitly varies the underlying resources upon which expansion proceeds with the industries in question and provides a percentile relatedness rank for every possible pair of fourdigit SIC manufacturing industries. The general index is tested for predictive validity and found to perform as expected. Applications of the index in strategy research are suggested.
Length: 39 pages
Creation-Date: 2006-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101771
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:06-31

Template-Type: ReDIF-Paper 1.0
Author-Name: Lucia Foster
Author-Name: John Haltiwanger
Author-Name: Namsuk Kim
Title: Gross Job Flows for the U.S. Manufacturing Sector: Measurement from the Longitudinal Research Database 
Abstract: Measures of job creation and destruction are now produced regularly by the U.S. statistical agencies. The Bureau of Labor Statistics releases via the Business Employment Dynamics (BED) on a quarterly basis measures of job creation and destruction for the U.S. nonfarm business sector and related disaggregation by industrial sector and size class. The U.S. Census Bureau has developed the Longitudinal Business Database (LBD) covering the nonfarm business sector that has been used to produce research analysis and special tabulations including tabulations of job creation and destruction. Both of these data programs build upon the measurement methods and data analysis of job creation and destruction measures from the Longitudinal Research Database (LRD) developed and published by Davis, Haltiwanger and Schuh (1996). In this paper, the LRD based estimates of job creation and destruction are updated and made available for consistent annual and quarterly series from 1972-1998. While the BED and LBD programs are more comprehensive in scope than the LRD, the extensive development of the LRD permits the construction of measures of job creation and destruction for a rich array of employer characteristics including industry, size, business age, ownership structure, location and wage structure. The updated series that are released with this working paper provide measures along each of these dimensions. The paper describes in detail the changes in the processing of the Annual Survey of Manufactures over the 1972-1998 period that are important to incorporate by users of the LRD at Census Research Data Centers as well as users of products from the LRD such as job creation and destruction.
Length: 42 pages
Creation-Date: 2006-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101770
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: J63, L6, Y1
Keywords: 
Handle: RePEc:cen:wpaper:06-30

Template-Type: ReDIF-Paper 1.0
Author-Name: Natarajan Balasubramanian
Author-Name: Marvin Lieberman
Title: Industry Learning Environments and the Heterogeneity of Firm Performance
Abstract: This paper characterizes inter-industry heterogeneity in rates of learning-by-doing and examines how industry learning rates are connected with firm performance. Using data from the Census Bureau and Compustat, we measure the industry learning rate as the coefficient on cumulative output in a production function. We find that learning rates vary considerably among industries and are higher in industries with greater R&D, advertising, and capital intensity. More importantly, we find that higher rates of learning are associated with wider dispersion of Tobins q and profitability among firms in the industry. Together, these findings suggest that learning intensity represents an important characteristic of the industry environment.
Length: 54 pages
Creation-Date: 2006-12
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101769
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: Learning, Firm Heterogeneity, RBV, Productivity
Handle: RePEc:cen:wpaper:06-29

Template-Type: ReDIF-Paper 1.0
Author-Name: William Kerr
Author-Name: Shihe Fu
Title: The Industry R&D Survey: Patent Database Link Project
Abstract: This paper details the construction of a firm-year panel dataset combining the NBER Patent Dataset with the Industry R&D Survey conducted by the Census Bureau and National Science Foundation. The developed platform offers an unprecedented view of the R&D-to-patenting innovation process and a close analysis of the strengths and limitations of the Industry R&D Survey. The files are linked through a name-matching algorithm customized for uniting the firm names to which patents are assigned with the firm names in Census Bureaus SSEL business registry. Through the Census Bureaus file structure, this R&D platform can be linked to the operating performances of each firms establishments, further facilitating innovation-to-productivity studies.
Length: 29 pages
Creation-Date: 2006-11
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101768
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: C81, O30, O31
Keywords: innovation, research and development, patents, scientists, technology
Handle: RePEc:cen:wpaper:06-28

Template-Type: ReDIF-Paper 1.0
Author-Name: Charles Tolbert
Author-Name: Troy Blanchard
Author-Name: Michael Irwin
Title: Stability and Change in Individual Determinants of Migration: Evidence from 1985-1990 and 1995 to 2000
Abstract: In this paper, we compare the reliability of migration estimates from two rather different macroeconomic periods in recent U.S. history. One of these periods, 1985-1990 coincides with the culmination of a vast industrial restructuring which saw a significant decline in manufacturing employment. The other period, 1995-2000, encompasses a time of robust economic growth and tight labor markets driven by productivity gains associated with new technologies. Our interest here is in the stability of common individual-level predictors of migration in these rather disparate macroeconomic contexts. Using confidential internal versions of the 1990 and 2000 Census long-form data, we estimate logistic models of the likelihood that individuals will migrate. The geographic detail in the internal Census data permits us to measure migration in ways that are not possible with public-domain Census data on persons. We develop migration definitions that distinguish between local residential mobility likely associated with life course transitions from migration out of the labor market area that may be driven more by employment and other socioeconomic considerations. Using logistic modeling, we find that the same individual attributes predict migration reasonably well during both periods. We also compute some illustrative probabilities of migration that show temporal stability in migration predictors could be lessened by certain changes in population composition.
Length: 31 pages
Creation-Date: 2006-11
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101767
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: Migration, United States Census
Handle: RePEc:cen:wpaper:06-27

Template-Type: ReDIF-Paper 1.0
Author-Name: Ekaterina Emm
Author-Name: Jayant Kale
Title: Efficiency Implications of Corporate Diversification: Evidence from Micro Data
Abstract: In this study, we contribute to the ongoing research on the rationales for corporate diversification. Using plant-level data from the U.S. Census Bureau, we examine whether combining several lines of business in one entity leads to increased productive efficiency. Studying the direct effect of diversification on efficiency allows us to discern between two major theories of corporate diversification: the synergy hypothesis and the agency cost hypothesis. To measure productive efficiency, we employ a non-parametric approacha test based on Varians Weak Axiom of Profit Maximization (WAPM). This method has several advantages over other conventional measures of productive efficiency. Most importantly, it allows one to perform the efficiency test without relying on assumptions about the functional form of the underlying production function. To the best of our knowledge, this study is the first application of the WAPM test to a large sample of non-financial firms. The study provides evidence that business segments of diversified firms are more efficient compared to single-segment firms in the same industry. This finding suggests that the existence of the so-called diversification discount cannot be explained by efficiency differences between multi-segment and focused firms. Furthermore, more efficient segments tend to be vertically integrated with others segments in the same firm and to have been added through acquisitions rather than grown internally. Overall, the results of this study indicate that corporate diversification is value-enhancing, and that it is not necessarily driven by managers pursuit of their private benefits.
Length: 69 pages
Creation-Date: 2006-11
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101766
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: D2, D92, G34
Keywords: Restructuring, Diversification, Efficiency
Handle: RePEc:cen:wpaper:06-26

Template-Type: ReDIF-Paper 1.0
Author-Name: Andrew Figura
Title: Explaining Cyclical Movements in Employment: Creative-Destruction or Changes in Utilization?
Abstract: An important step in understanding why employment fluctuates cyclically is determining the relative importance of cyclical movements in permanent and temporary plant-level employment changes. If movements in permanent employment changes are important, then recessions are times when the destruction of job specific capital picks up and/or investment in new job capital slows. If movements in temporary employment changes are important, then employment fluctuations are related to the temporary movement of workers across activities (e.g. from work to home production or search and back again) as the relative costs/benefits of these activities change. I estimate that in the manufacturing sector temporary employment changes account for approximately 60 percent of the change in employment growth over the cycle. However, if permanent employment changes create and destroy more capital than temporary employment changes, then their economic consequences would be relatively greater. The correlation between gross permanent employment changes and capital intensity across industries supports the hypothesis that permanent employment changes do create and destroy more capital than temporary employment changes.
Length: 34 pages
Creation-Date: 2006-11
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101765
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: J23, E24
Keywords: Cyclical Employment Changes, Permanent and Temporary Employment Changes
Handle: RePEc:cen:wpaper:06-25

Template-Type: ReDIF-Paper 1.0
Author-Name: Andrew Figura
Title: Why Are Plant Deaths Countercyclical: Reallocation Timing or Fragility?
Abstract: Because plant deaths destroy specific capital with large local economic impacts and potentially important macroeconmic effects, understanding the causes of deaths and, in particular, why they are concentrated in cyclical downturns, is important. The reallocationtiming hypothesis posits that plants suffering adverse permanent demand/productivity shocks delay shutdowns until cyclical downturns when plant capacity is less valuable, while the fragility hypothesis posits that shutdowns occur in downturns because the option value of maintaining the plant through low profitability periods is too small. I show that the effect that a plants specific capital has on the timing of plant deaths differs across these two hypotheses and then use this insight to test the hypotheses relative importance. I find that fragility is the dominant cause of the countercyclical behavior of plant deaths. This suggests that the endogenous destruction of capital is likely an important amplification and propagation mechanism for cyclical shocks and that stabilization policies have the benefit of reduced capital destruction.
Length: 43 pages
Creation-Date: 2006-11
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101764
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: E20, E22, E32 
Keywords: Plant deaths, business cycle
Handle: RePEc:cen:wpaper:06-24

Template-Type: ReDIF-Paper 1.0
Author-Name: Javier Miranda
Author-Name: Ron Jarmin
Title: The Impact of Hurricanes Katrina, Rita and Wilma on Business Establishments: A GIS Approach
Abstract: We use Geographic Information System tools to develop estimates of the economic impact of disaster events such as Hurricane Katrina. Our methodology relies on mapping establishments from the Census Bureaus Business Register into damage zones defined by remote sensing information provided by FEMA. The identification of damaged establishments by precisely locating them on a map provides a far more accurate characterization of affected businesses than those typically reported from readily available county level data. The need for prompt estimates is critical since they are more valuable the sooner they are released after a catastrophic event. Our methodology is based on pre-storm data. Therefore, estimates can be made available very quickly to inform the public as well as policy makers. Robustness tests using data from after the storms indicate our GIS estimates, while much smaller than those based on publicly available county-level data, still overstate actual observed losses. We discuss ways to refine and augment the GIS approach to provide even more accurate estimates of the impact of disasters on businesses.
Length: 27 pages
Creation-Date: 2006-08
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101763
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: Q54, R11, C13, C81, O47
Keywords: Natural Disaster, Economic Impact, Economic Activity, Business Register
Handle: RePEc:cen:wpaper:06-23

Template-Type: ReDIF-Paper 1.0
Author-Name: Marigee Bacolod
Title: Do Alternative Opportunities Matter? The Role of Female Labor Markets in the Decline of Teacher Quality
Abstract: This paper documents the widely perceived but little investigated notion that teachers today are less qualified than they once were. Using standardized test scores, undergraduate institution selectivity, and positive assortative mating characteristics as measures of quality, evidence of a marked decline in the quality of young women going into teaching between 1960 and 1990 is presented. In contrast, the quality of young women becoming professionals increased. The Roy model of selfselection is used to highlight how occupation differences in the returns to skill determine average teacher quality. Estimates suggest the significance of increasing professional opportunities for women in affecting the decline in teacher quality.
Length: 37 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101762
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: I20, J16, J31, J48
Keywords: 
Handle: RePEc:cen:wpaper:06-22

Template-Type: ReDIF-Paper 1.0
Author-Name: Ali Hortacsu
Author-Name: Chad Syverson
Title: Cementing Relationships: Vertical Integration, Foreclosure, Productivity, and Prices
Abstract: This paper looks at the reasons for and results of vertical integration, with specific regard to its possible effects on market power as proposed in the theoretical literature on foreclosure. It uses a rich data set on producers in the cement and ready-mixed concrete industries over a 34- year period to perform a detailed case study. There is little evidence that foreclosure effects are quantitatively important in these industries. Instead, prices fall, quantities rise, and entry rates remain unchanged when markets become more integrated. We suggest an alternative mechanism that is consistent with these patterns and provide additional evidence in support of it: namely, that higher productivity producers are more likely to vertically integrate, and as has been documented elsewhere, are also larger, more likely to grow and survive, and charge lower prices. We explore possible sources of vertically integrated producers productivity advantage and find that the advantage is tied to firm size, possibly in part through improved logistics coordination, but not to several other possible explanations.
Length: 53 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101761
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-21

Template-Type: ReDIF-Paper 1.0
Author-Name: Arpad Abraham
Author-Name: Kirk White
Title: The Dynamics of Plant-Level Productivity in U.S. Manufacturing
Abstract: Using a unique database that covers the entire U.S. manufacturing sector from 1976 until 1999, we estimate plant-level total factor productivity for a large number of plants. We characterize time series properties of plant-level idiosyncratic shocks to productivity, taking into account aggregate manufacturing-sector shocks and industry-level shocks. Plant-level heterogeneity and shocks are a key determinant of the cross-sectional variations in output. We compare the persistence and volatility of the idiosyncratic plant-level shocks to those of aggregate productivity shocks estimated from aggregate data. We find that the persistence of plant level shocks is surprisingly low-we estimate an average autocorrelation of the plantspecific productivity shock of only 0.37 to 0.41 on an annual basis. Finally, we find that estimates of the persistence of productivity shocks from aggregate data have a large upward bias. Estimates of the persistence of productivity shocks in the same data aggregated to the industry level produce autocorrelation estimates ranging from 0.80 to 0.91 on an annual basis. The results are robust to the inclusion of various measures of lumpiness in investment and job flows, different weighting methods, and different measures of the plants capital stocks.
Length: 28 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101760
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: D24, L6, O47
Keywords: productivity, manufacturing, microdata
Handle: RePEc:cen:wpaper:06-20

Template-Type: ReDIF-Paper 1.0 
Author-Name: Clarissa Yeap
Title: The Production Decisions of Large Competitors: Detecting Cost Advantages and Strategic Behavior in Restaurants
Abstract: This paper evaluates firm profitability in the highly competitive restaurant industry by comparing variation in firm size and production decisions with variation in market size. In the Census microdata, I find that multi-unit firms operate a greater number of restaurants and larger individual restaurants in larger MSAs. They also increase production intensity by increasing production during operating hours, extending operating hours, increasing the volume of meals and non-meals output. These results are generally consistent with full capacity exploitation in efficient firms, rather than underutilization by firms seeking to limit rivalry through excess capacity or product proliferation.
Length: 38 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101759
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-19

Template-Type: ReDIF-Paper 1.0
Author-Name: Clarissa Yeap
Title: Residual Claims and Incentives in Restaurant Chains
Abstract: I examine the relationship between ownership and production activities using a new dataset of restaurant chains. Production in restaurant chains provides an opportunity to examine the effects of residual claims on incentives because production is decentralized and fairly uniform across restaurants in the same chain. Yet the allocation of residual claims varies between company-owned and franchised units, affecting the strength of incentives for restaurantlevel activities. The decision to own or franchise each restaurant reflects the value of either withholding or allocating residual claims for performing these activities. I find that more complex production activities are systematically correlated with company ownership. Onsite food production raises the likelihood of company ownership by 28% relative to offsite food production. Table service raises the likelihood of company ownership by 26% relative to counter service. The results are not consistent with straightforward effort-promoting effects of residual claims in simple principal agent models. They are consistent with the view that residual claims can generate unbalanced incentives across diverse tasks.
Length: 47 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101758
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-18

Template-Type: ReDIF-Paper 1.0
Author-Name: Stephen Davis
Author-Name: John Haltiwanger
Author-Name: Ron Jarmin
Author-Name: Javier Miranda
Title: Volatility and Dispersion in Business Growth Rates: Publicly Traded Versus Privately Held Firms
Abstract: We study the variability of business growth rates in the U.S. private sector from 1976 onwards. To carry out our study, we exploit the recently developed Longitudinal Business Database (LBD), which contains annual observations on employment and payroll for all U.S. businesses. Our central finding is a large secular decline in the cross sectional dispersion of firm growth rates and in the average magnitude of firm level volatility. Measured the same way as in other recent research, the employment-weighted mean volatility of firm growth rates has declined by more than 40% since 1982. This result stands in sharp contrast to previous findings of rising volatility for publicly traded firms in COMPUSTAT data. We confirm the rise in volatility among publicly traded firms using the LBD, but we show that its impact is overwhelmed by declining volatility among privately held firms. This pattern holds in every major industry group. Employment shifts toward older businesses account for 27 percent or more of the volatility decline among privately held firms. Simple cohort effects that capture higher volatility among more recently listed firms account for most of the volatility rise among publicly traded firms.
Length: 54 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101757
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: Firm Volatility, Employment Growth, Publicly traded, LBD, longitudinal microdata
Handle: RePEc:cen:wpaper:06-17

Template-Type: ReDIF-Paper 1.0
Author-Name: Jeffrey Mayer
Title: E-Tailing and its Prospects: Great Expectations Reconsidered
Abstract: This paper attributes slower than predicted growth in e-commerce retailing to four factors: consumer resistance; the ability of traditional retailers to become multi-channel sellers; prudent official survey and classification practices; and perhaps the limited range of pure-play business models (i.e., retail models that rely mainly on electronic sales). Based on responses to the Census Bureaus Monthly Retail Trade Survey (MRTS) in the five fourth quarter periods from 2001 to 2005, the paper finds that e-commerce has claimed a small but rapidly growing share of U.S. retailing markets; and that pure play companies are still important drivers of this process. However, it also finds that the capacity of pure-play companies to continue in this role may be nearing its limits, and that the rate of continued growth in e-commerce retailing may depend on the business decisions of large, multi-channel sellers. Qualified researchers can access MRTS-based quarterly e-commerce data for 2001-2005 at the Census Bureaus Regional Data Centers.
Length: 9 pages
Creation-Date: 2006-07
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101756
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: e-commerce, retailing, pure-play retailing, Monthly Retail Trade Survey
Handle: RePEc:cen:wpaper:06-16

Template-Type: ReDIF-Paper 1.0
Author-Name: Sang Nguyen
Author-Name: B.K. Atrostic
Title: How Businesses Use Information Technology: Insights for Measuring Technology and Productivity
Abstract: Business use of computers in the United States dates back fifty years. Simply investing in information technology is unlikely to offer a competitive advantage today. Differences in how businesses use that technology should drive differences in economic performance. Our previous research found that one business use  computers linked into networks  is associated with significantly higher labor productivity. In this paper, we extend our analysis with new information about the ways that businesses use their networks. Those data show that businesses conduct a variety of general processes over computer networks, such as order taking, inventory monitoring, and logistics tracking, with considerable heterogeneity among businesses. We find corresponding empirical diversity in the relationship between these on-line processes and productivity, supporting the heterogeneity hypothesis. On-line supply chain activities such as order tracking and logistics have positive and statistically significant productivity impacts, but not processes associated with production, sales, or human resources. The productivity impacts differ by plant age, with higher impacts in new plants. This new information about the ways businesses use information technology yields vital raw material for understanding how using information technology improves economic performance.
Length: 34 pages
Creation-Date: 2006-06
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101755
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: Information Technology, E-business Processes, Productivity
Handle: RePEc:cen:wpaper:06-15

Template-Type: ReDIF-Paper 1.0
Author-Name: William Evans
Author-Name: Wooyoung Kim
Title: The Impact of Local Labor Market Conditions on the Demand for Education: Evidence from Indian Casinos
Abstract: Using restricted-use data from the 1990 and 2000 Census long-form, we analyze the impact of local labor market conditions on the demand for education using the economic shock produced by the opening of a new casino on an Indian reservation as the identifying event. Federal legislation in 1988 allowed Indian tribes to open casinos in many states and since then, over 400 casinos have opened, 240 of which have Las Vegas-style games. We demonstrate that the opening of a casino increased the employment and wages of low-skilled workers. Young adults responded by dropping out of high school and reducing college enrollment rates, even though many tribes have generous college tuition subsidy programs.
Length: 42 pages
Creation-Date: 2006-06
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101754
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-14

Template-Type: ReDIF-Paper 1.0
Author-Name: Alice Zawacki
Title: Using the MEPS-IC to Study Retiree Health Insurance
Abstract: This paper discusses using the restricted-access Medical Expenditure Panel Survey- Insurance Component (MEPS-IC) to study employer-sponsored retiree health insurance (RHI). This topic is particularly interesting given current events such as the aging of baby boomers, rising health care costs, new prescription drug coverage under Medicare, and changes in accounting standards for reporting liabilities related to RHI offerings. Consequently, employers are grappling with an aging workforce, evaluating Medicare subsidies to employers for offering retiree drug plans, facing rising premium costs as a result of rising health care costs, and trying to show profitability on financial reports. This paper provides technical information on using the MEPS-IC to study RHI and points out data issues with some of the measures in the database. Descriptive statistics are provided to illustrate the types of retiree estimates possible using the MEPS-IC and to show some of the trends in this subject area. Not surprising, these estimates show that employer offers of RHI have declined, greater numbers of retirees are enrolling in these plans, and expenditures for employer-sponsored RHI have been rising.
Length: 27 pages
Creation-Date: 2006-04 
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101753
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-13

Template-Type: ReDIF-Paper 1.0
Author-Name: David Rigby
Author-Name: Sebastien Breau
Title: Impacts of Trade on Wage Inequality in Los Angeles: Analysis Using Matched Employer-Employee Data
Abstract: Over the past twenty-five years, earnings inequality has risen dramatically in the US, reversing trends of the preceding half-century. Growing inequality is closely tied to globalization and trade through the arguments of Heckscher-Ohlin. However, with only few exceptions, empirical studies fail to show that trade is the primary determinant of shifts in relative wages. We argue that lack of empirical support for the trade-inequality connection results from the use of poor proxies for worker skill and the failure to control for other worker characteristics and plant characteristics that impact wages. We remedy these problems by developing a matched employer-employee database linking the Decennial Household Census (individual worker records) and the Longitudinal Research Database (individual manufacturing establishment records) for the Los Angeles CMSA in 1990 and 2000. Our results show that trade has a significant impact on wage inequality, pushing down the wages of the less-skilled while allowing more highly skilled workers to benefit from exports. That impact has increased through the 1990s, swamping the influence of skill-biased technical change in 2000. Further, the negative effect of trade on the wages of the less-skilled has moved up the skill distribution over time. This suggests that over the long-run, increasing levels of education may not insulate more skilled workers within developed economies from the impacts of trade.
Length: 29 pages
Creation-Date: 2006-04 
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101752
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-12

Template-Type: ReDIF-Paper 1.0
Author-Name: Daniel Weinberg
Title: Measuring Poverty in the United States: History and Current Issues 
Abstract: Formal measurement of poverty in the United States is now about 40 years old. This paper first briefly describes the origins and basis of the official poverty thresholds adopted by the federal government in the late 1960s. Then, it discusses in some detail some of the more current issues that observers suggest must be addressed if changes are to be made. The final sections discuss recent efforts to propose alternates to the current official approach.
Length: 35 pages
Creation-Date: 2006-04
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101751
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-11

Template-Type: ReDIF-Paper 1.0
Author-Name: Patrick Conway
Title: Downsizing, Layoffs and Plant Closure: The Impacts of Import Price Pressure and Technological Growth on U.S. Textile Producers
Abstract: Downsizing, layoffs and plant closure are three plant-level responses to adverse economic conditions. I provide a theoretical and empirical analysis that illustrates the sources of each phenomenon and the implications for production and employment in the textiles industry. I consider two potential causes of these phenomena: technological progress and increased import competition. I create a micro-founded model of plant-level decision-making and combine it with conditions for dynamic market equilibrium. Through use of detailed plant-level information available in the US Census of Manufacturers and the Annual Survey of Manufacturers for the period 1982-2001, along with price data on imports, I examine the relative contribution of technology and import competition to the decline in output, employment and number of plants in textiles production in the US in recent years. The market-clearing domestic price of textiles is identified as a crucial channel in transmitting technology or import price shocks to downsizing, layoffs and plant closure. The model is estimated on two 4-digit sectors of textiles production (SIC 2211, broadwoven cotton and SIC 2221, broadwoven man-made fiber). The results validate modeling the production sectors as monopolistically competitive, and the elasticity of substitution between foreign and domestic varieties is found to be quite high. The coefficients on the productive technology are sensible, as are the estimated parameters of the plant exit, entry and investment decision rules. In simulations for the broadwoven cotton industry, the effects of technological progress are shown to have a much larger impact on layoffs than on plant closure, with plant size as measured by output actually increasing. Falling foreign prices lead to greater relative magnitudes of plant closure than of downsizing or layoffs.
Length: 44 pages
Creation-Date: 2006-04
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101750
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-10

Template-Type: ReDIF-Paper 1.0
Author-Name: Patrick Conway
Title: Import Price Pressure on Firm Productivity and Employment: The Case of U.S. Textiles
Abstract: Theoretical research has predicted three different effects of increased import competition on plant-level behavior: reduced domestic production and sales, improving average efficiency of plants, and increased exit of marginal firms. In empirical work, though, such effects are difficult to separate from the impact of exogenous technological progress (or regress). I use detailed plant-level information available in the US Census of Manufacturers and the Annual Survey of Manufacturers for the period 1983-2000 to decompose these effects. I derive the relative contribution of technology and import competition to the increase in productivity and the decline in employment in textiles production in the US in recent years. I then simulate the impact of removal of quota protection on the scale of operation of the average plant and the incentive to plant closure. The methodology employs a number of important innovations in examining the impact of falling import prices on the domestic production of an import-competing good. First, import competition is modeled directly through its impact on the relative prices of monopolistically competitive goods along the lines suggested by Melitz (2000). Second, the effect of technology is incorporated through structural estimation of plant-level production functions in four factors (capital, labor, energy and materials). Solutions to econometric difficulties related to missing capital data and unobserved productivity are incorporated into the estimation technique. The model is estimated for plants with primary product in SIC 2211 (broadwoven cotton cloth). Results validate modeling demand as for differentiated products. Technological coefficients are sensible, with exogenous technological progress playing a large role. In the simulations run, the effects of foreign price competition are orders of magnitude higher than those of technological progress for the period after quotas on imports are removed. The large-scale reduction in employment and output in the US is shown to be a combination of reduced employment and output at plants in continuous operation and of plant closures that exceed new entries.
Length: 60 pages
Creation-Date: 2006-03 
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101749
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-09

Template-Type: ReDIF-Paper 1.0
Author-Name: Allan Collard-Wexler
Title: Plant Turnover and Demand Fluctuations in the Ready-Mix Concrete Industry
Abstract: Fluctuations in demand cause some plants to exit a market and other to enter. Would eliminating these uctuations reduce plant turnover? A structural model of entry and exit in concentrated markets is estimated for the ready-mix concrete industry, using plant level data from the U.S. Census. The Nested Pseudo-Likelihood algorithm is used to nd parameters which rationalize behavior of rms involved in repeated competition. Due to high sunk costs, turnover rates would only be reduced by 3% by eliminating demand uctuations at the county level, saving around 20 million dollars a year in scrapped capital. However, demand uctuations blunt rmsincentive to invest, reducing the number of large plants by more than 50%.
Length: 53 pages
Creation-Date: 2006-03
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101748
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-08

Template-Type: ReDIF-Paper 1.0
Author-Name: Mine Zeynep Senses
Title: The Effects of Outsourcing on the Elasticity of Labor Demand
Abstract: In this paper, I focus on the effects of outsourcing on conditional labor demand elasticities. I begin by developing a model of outsourcing that formalizes this relationship. I show that the increased possibility of outsourcing (modeled as a decline in foreign intermediate input prices and an increase in the elasticity of substitution between foreign and domestic intermediate inputs) should increase labor demand elasticities. I also show that, a decline in the share of unskilled labor, due either to skill biased technological change or to movement of unskilled labor intensive stages abroad, can work in the opposite direction and reverse the increasing trend in elasticities. I then test the predictions of the model using the U.S. Census Bureaus Longitudinal Research Database (LRD). The instrumental variable approach used in the estimation of labor demand equations is the main methodological contribution of this paper. I directly address the endogeneity of wages in the labor demand equation by using average nonmanufacturing wages for each location and year as an instrumental variable for the plant-level wages in the manufacturing sector. The results support the main predictions of my model. U.S. manufacturing plants operating in industries that heavily outsource experienced an increase in their conditional labor demand elasticities during the 1980-1992 period. After 1992 elasticities began to decrease in outsourcing industries. This finding is consistent with the model which suggests that a decline in the share of unskilled labor in total cost could result in such a decrease in labor demand elasticities, precisely when the level of outsourcing is high. Estimates at the two-digit industry level provide further evidence in support of the hypothesis that heavily outsourcing industries experience greater increases in their elasticities.
Length:  pages
Creation-Date: 2006-03
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101747
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-07

Template-Type: ReDIF-Paper 1.0
Author-Name: Sbastien Breau
Author-Name: David L. Rigby
Title: Is There Really an Export Wage Premium? A Case Study of Los Angeles Using Matched Employee-Employer Data
Abstract: This paper investigates the effects of exporting on wages, specifically the claim that workers are paid higher wages if they are employed in manufacturing plants that export vis--vis plants that do not export. Past research on US plants has supported the existence of an export wage premium, though European studies dispute those results calling for more care in econometric investigation to control for worker characteristics. We answer this call developing a matched employee-employer data set linking worker characteristics from the one-in-six long form of the Decennial Household Census to manufacturing establishment data from the Longitudinal Research Database. Analysis focuses on 1990 and 2000 data for the Los Angeles Consolidated Metropolitan Statistical Area. Our results confirm that the average wage in manufacturing plants that export is greater than that in manufacturing plants that do not export. However, after controlling for worker characteristics such as age, gender, education, race and nationality, the export wage premium vanishes. That is, when comparing workers with similar characteristics, there is no wage difference between exporting and non-exporting plants. These results concord with recent findings from Europe and elsewhere.
Length: 24 pages
Creation-Date: 2006-02
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101746
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-06

Template-Type: ReDIF-Paper 1.0
Author-Name: Susan Chen
Author-Name: Wilbert van der Klaauw
Title: The Work Disincentive Effects of the Disability Insurance Program in the 1990s
Abstract: In this paper we evaluate the work disincentive effects of the Disability Insurance program during the 1990s. To accomplish this we construct a new large data set with detailed information on DI application and award decisions and use two different econometric evaluation methods. First, we apply a comparison group approach proposed by John Bound to estimate an upper bound for the work disincentive effect of the current DI program. Second, we adopt a Regression-Discontinuity approach that exploits a particular feature of the DI eligibility determination process to provide a credible point estimate of the impact of the DI program on labor supply for an important subset of DI applicants. Our estimates indicate that during the 1990s the labor force participation rate of DI beneficiaries would have been at most 20 percentage points higher had none received benefits. In addition, we find even smaller labor supply responses for the subset of marginal applicants whose disability determination is based on vocational factors.
Length: 56 pages
Creation-Date: 2006-02
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101745
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-05

Template-Type: ReDIF-Paper 1.0
Author-Name: Javier Miranda
Author-Name: Alfred Nucci
Author-Name: Steven J. Davis
Author-Name: John Haltiwanger
Author-Name: Ron S. Jarmin
Author-Name: C.J. Krizan
Author-Name: Kristin Sandusky
Title: Measuring the Dynamics of Young and Small Businesses: Integrating the Employer and Nonemployer Universes
Abstract: We develop a preliminary version of an Integrated Longitudinal Business Database (ILBD) that combines administrative records and survey-based data for virtually all employer and nonemployer business units in the United States. In the process, we confront conceptual and practical issues that arise in measuring the importance and dynamic behavior of younger and smaller businesses. We also document some basic facts about younger and smaller businesses. In doing so, we exploit the ability of the ILBD to follow business transitions between employer and nonemployer status, and vice-versa. This aspect of the ILBD opens a new frontier for the study of business formation and the precursors to job creation in the U.S. economy.
Length: 40 pages
Creation-Date: 2006-02 
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101744
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: L22, M13
Keywords: Data integration, nonemployer businesses, LBD
Handle: RePEc:cen:wpaper:06-04

Template-Type: ReDIF-Paper 1.0
Author-Name: Lucia Foster
Title: Reallocation and Productivity Dynamics in the Appalachian Region
Abstract: The Appalachian Region has long suffered from poor economic performance as measured over a variety of dimensions. Even as the region has improved over the last few decades, Appalachia still lags behind the nation. A growing body of empirical work has found that reallocation is pervasive in the U.S. economy and is an integral component of economic growth. Productivity growth is improved when resources are shifted from less productive establishments towards more productive establishments either through changes in existing establishments or through the births and deaths of establishments. Establishments that use new products, technologies, and production processes replace establishments that do not in a continual process of creative destruction. Using establishment-level data, this paper examines the reallocation and productivity dynamics of the Appalachian Region. The first part of the paper compares the reallocation dynamics of Appalachia to the rest of the U.S. using a newly developed establishment-level database that covers virtually the entire U.S. economy. From this analysis, it is apparent that establishment birth and death rates and job creation and destruction rates for Appalachia are consistently below those for the rest of the U.S.. The second part of the paper uses data from the Economic Censuses to determine whether the establishment and employment dynamics of the Appalachian Region are also qualitatively different (in terms of their productivity rankings) from their U.S. counterparts. It appears that the North subregion of Appalachia has reallocation and productivity dynamics that are consistent with an impeded creative destruction story.
Length: 44 pages
Creation-Date: 2006-01 
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101743
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: J24, O47
Keywords: 
Handle: RePEc:cen:wpaper:06-03

Template-Type: ReDIF-Paper 1.0
Author-Name: Christopher Johann Kurz
Title: Outstanding Outsourcers: A Firm- and Plant-Level Analysis of Production Sharing
Abstract: This paper examines the differences in characteristics between outsourcers and nonoutsourcers with a particular focus on productivity. The measure of outsourcing comes from a question in the 1987 and 1992 Census of Manufactures regarding plant-level purchases of foreign intermediate materials. There are two key findings. First, outsourcers are outstanding. That is, all else equal, outsourcers tend to have premia for plant and firm characteristics, such as being larger, more capital intensive, and more productive. One exception to this outsourcing premia is that wages tend to be the same for both outsourcers and non-outsourcers. Second, outsourcing firms, but not plants, have significantly higher productivity growth.
Length: 38 pages
Creation-Date: 2006-01 
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101742
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: 
Keywords: 
Handle: RePEc:cen:wpaper:06-02

Template-Type: ReDIF-Paper 1.0
Author-Name: Grigoris Zarotiadis
Author-Name: T. Lynn Riggs
Title: Soft and Hard Within- and Between-Industry Changes of U.S. Skill Intensity: Shedding Light on Workers Inequality
Abstract: In order to examine the worsening of inequality between workers of different skill levels over the past three decades and to further motivate the theoretical discussion on this issue, we use the decomposition methodology to focus on the interaction of within- and between-industry changes of the relative skill intensity in U.S. manufacturing. Unlike previous work, we use more detailed levels of industry classification (5-digit SIC product codes), and we analyze the impact of plants switching industries as well as of plant births and deaths on these changes. Internal, plant-level data from the U.S. Census Bureau's Longitudinal Research Database and the new Longitudinal Business Database provide us with the requisite information to conduct these studies. Finally, our empirical conclusions are discussed in relation to the inspired theoretical inference, as they enrich the debate concerning the sources of the inequality by justifying the skill-biased character of technical change.
Length: 21 pages
Creation-Date: 2006-01
Publication-Status: 
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101741
File-Format: Application/pdf
File-Function: First version, 2006
Classification-JEL: F10, F16, E24, J21
Keywords: Skill Intensity, Skill-Biased Technical Change, Wage Inequality
Handle: RePEc:cen:wpaper:06-01