Template-Type: ReDIF-Paper 1.0
Author-Name: William Kerr
Author-Name: Ramana Nanda
Title: Democratizing Entry: Banking Deregulations, Financing Constraints, and Entrepreneurship
Abstract:  We study how US branch-banking deregulations affected the entry and exit of firms in the non-financial sector using establishment-level data from the US Census Bureaus Longitudinal Business Database. The comprehensive micro-data allow us to study how the entry rate, the distribution of entry sizes, and survival rates for firms responded to changes in banking competition. We also distinguish the relative effect of the policy reforms on the entry of startups versus facility expansions by existing firms. We find that the deregulations reduced financing constraints, particularly among small startups, and improved ex ante allocative efficiency across the entire firm-size distribution. However, the US deregulations also led to a dramatic increase in churning at the lower end of the size distribution, where new startups fail within the first three years following entry. This churning emphasizes a new mechanism through which financial sector reforms impact product markets. It is not exclusively better ex ante allocation of capital to qualified projects that causes creative destruction; rather banking deregulations can also democratize entry by allowing many more startups to be founded. The vast majority of these new entrants fail along the way, but a few survive ex post to displace incumbents.
Length: 41 pages
Creation-Date: 2007-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101806
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: E44, G21, L26, L43, M13
Keywords: banking, financial constraints, entrepreneurship, entry, exit, creative destruction, growth, deregulation
Handle: RePEc:cen:wpaper:07-33

Template-Type: ReDIF-Paper 1.0
Author-Name: John Tang
Title: The Role of Financial Conglomerates in Industry Formation: Evidence from Early Modern Japan
Abstract: Large conglomerates known as zaibatsu have long been credited with leading Japanese industrialization during the Meiji Period (1868-1912). I develop a new dataset collected from corporate genealogies and estimate the likelihood of first entry with discrete choice econometric methods. I find zaibatsu are indeed more likely to pioneer new industries relative to independent firms. This may be due to their ability to finance investments internally, autonomy from shareholder interference, and lower risk aversion from being diversified. Nevertheless, zaibatsu lag independent firms in introducing innovative technologies, possibly from their preference for scale and monopolistic industries, conservative ownership, and organizational complexity.
Length: 35 pages
Creation-Date: 2007-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101805
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: Meiji Period, zaibatsu, industrialization, late development, technology adoption
Handle: RePEc:cen:wpaper:07-32

Template-Type: ReDIF-Paper 1.0
Author-Name: Joshua Drucker
Author-Name: Edward Feser
Title: Regional Industrial Dominance, Agglomeration Economies, and Manufacturing Plant Productivity
Abstract:  In a seminal article, Benjamin Chinitz (1961) focused attention on the effects that industry size, structure, and economic diversification have on firm performance and regional economies. He also raised a related but conceptually distinct question that has been overlooked since: how does the extent to which a regional industry is concentrated in a single or small number of firms impact the performance of other local firms within that industry? He suggested that such regional industrial dominance may impact input prices, limit capital accessibility, deter entrepreneurial activity, and reduce the regional availability of agglomeration economies such as specialized labor and supply pools In this paper, we use an establishment-level production function to quantify the links between industrial dominance, agglomeration economies, and firm performance. We consider two questions. First, do greater levels of regional industrial dominance lead to lower economic performance by small, dominated manufacturing plants? Second, are small plants in dominated regional industries more limited in capturing regional agglomeration benefits and therefore do they face rigidities in deploying production factors to maximum advantage? Our results suggest that regional industrial organization does influence productivity but that the effect tends to be a direct one, rather than an indirect effect via its influence on agglomeration economies.
Length: 54 pages
Creation-Date: 2007-12
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101804
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-31

Template-Type: ReDIF-Paper 1.0
Author-Name: Timothy Bates
Author-Name: Alicia Robb
Title: Crime's Impact on the Survival Prospects of Young Urban Small Businesses
Abstract: High prevailing levels of criminal activity have numerous impacts on the viability of urban small businesses and the various impacts are not uniformly negative. It is the negative impacts, however, that are most often noted. Either the perception or reality of rampant crime can scare away customers, potential employees, lending institutions, even casualty insurance underwriters. Yet, competitors may also be driven away. Operating in a high-crime area can be advantageous, on balance, for some firms. Our analysis of nearly 5,000 urban businesses started between 1986 and 1992 indicates that those most seriously impacted by crime exhibit no measureable disadvantage regarding firm size, capitalization, survival rates, or other traits, relative to firms whose owners report that crime has not impacted them negatively.
Length: 30 pages
Creation-Date: 2007-10
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101803
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: small business survival patterns
Handle: RePEc:cen:wpaper:07-30

Template-Type: ReDIF-Paper 1.0
Author-Name: Evan Rawley
Title: Diversification, Organizational Adjustment and Firm Performance: Evidence from Microdata
Abstract:  This paper proposes that diversification taxes firms existing organizational systems by altering routines, formal contract structures and strategies. I test the proposition that organizational adjustment costs associated with diversification erode incumbent competitive advantage, using novel microdata on taxicab firms from the Economic Census. The tests exploit exogenous local characteristics of taxi markets to identify the impact of diversification on firm organization and performance. Supporting the contention that diversification leads to organizational adjustments, the results show that diversifying firms are less likely to adopt computerized dispatching systems for their taxicabs and make significant changes in their formal contract structures governing asset ownership. Consistent with the theory, diversification is associated with falling taxi productivity. Comparing the productivity of diversified and focused start-ups and incumbent firms reveals that the organizational change component of diversification accounts for an 18% decrease in paid ride-miles per taxi. The results support the core contention of the paper that diversification taxes firms existing organizational capital.
Length: 66 pages
Creation-Date: 2007-10
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101802
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: diversification, organizational adjustment, productivity, entry, liability of newness, competitive advantage
Handle: RePEc:cen:wpaper:07-29

Template-Type: ReDIF-Paper 1.0
Author-Name: Steven Davis
Author-Name: Cheryl Grim
Author-Name: John Haltiwanger
Author-Name: Mary Streitwieser
Title: Electricity Pricing to U.S. Manufacturing Plants, 1963-2000
Abstract:  We construct a large customer-level database and use it to study electricity pricing patterns from 1963 to 2000. The data show tremendous cross-sectional dispersion in the electricity prices paid by manufacturing plants, reflecting spatial price differences and quantity discounts. Price dispersion declined sharply between 1967 and 1977 because of erosion in quantity discounts. To estimate the role of cost factors and markups in quantity discounts, we exploit differences among utilities in the purchases distribution of their customers. The estimation results reveal that supply costs per watt-hour decline by more than half over the range of customer-level purchases in the data, regardless of time period. Prior to the mid 1970s, marginal price and marginal cost schedules with respect to annual purchase quantity are remarkably similar, in line with efficient pricing. In later years, marginal supply costs exceed marginal prices for smaller manufacturing customers by 10% or more. The evidence provides no support for a standard Ramsey-pricing interpretation of quantity discounts on the margin we study. Spatial dispersion in retail electricity prices among states, counties and utility service territories is large, rises over time for smaller purchasers, and does not diminish as wholesale power markets expand in the 1990s.
Length: 63 pages
Creation-Date: 2007-10
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101801
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: L60, L94, Q40
Keywords: electricity pricing and supply costs, quantity discounts, Ramsey pricing, spatial price dispersion
Handle: RePEc:cen:wpaper:07-28

Template-Type: ReDIF-Paper 1.0
Author-Name: Patrick Bayer
Author-Name: Fernando Ferreira
Author-Name: Robert McMillan
Title: A Unified Framework for Measuring Preferences for Schools and Neighborhoods
Abstract: This paper develops a comprehensive framework for estimating household preferences for school and neighborhood attributes in the presence of sorting. It embeds a boundary discontinuity design in a heterogeneous model of residential choice to address the endogeneity of school and neighborhood attributes. The model is estimated using restricted-access Census data from a large metropolitan area, yielding a number of new results. First, households are willing to pay less than one percent more in house prices  substantially lower than previous estimates  when the average performance of the local school increases by five percent. Second, much of the apparent willingness to pay for more educated and wealthier neighbors is explained by the correlation of these sociodemographic measures with unobserved neighborhood quality. Third, neighborhood race is not capitalized directly into housing prices; instead, the negative correlation of neighborhood race and housing prices is due entirely to the fact that blacks live in unobservably lower quality neighborhoods. Finally, there is considerable heterogeneity in preferences for schools and neighbors: in particular, we find that households prefer to selfsegregate on the basis of both race and education.
Length: 51 pages
Creation-Date: 2007-10
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101800
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-27

Template-Type: ReDIF-Paper 1.0
Author-Name: Timothy Dunne
Author-Name: Mark Roberts
Author-Name: Shawn Klimek
Author-Name: Yi Xu
Title: The Dynamics of Market Structure and Market Size in Two Health Services Industries
Abstract: The relationship between the size of a market and the competitiveness of the market has been of long-standing interest to IO economists. Empirical studies have used the relationship between the size of the geographic market and both the number of firms in the market and the average sales of the firms to draw inferences about the degree of competition in the market. This paper extends this framework to incorporate the analysis of entry and exit flows. A key implication of recent entry and exit models is that current market structure will likely depend upon history of past participation. The paper explores these issues empirically by examining producer dynamics for two health service industries, dentistry and chiropractic services. We find that the number of potential entrants and past number of incumbent firms are correlated with current market structure. The empirical results also show that as market size increases the number of firms rises less than proportionately, firm size increases, and average productivity increases. However, the magnitude of the correlations are sensitive to the inclusion of the market history variables.
Length: 35 pages
Creation-Date: 2007-10
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101799
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-26

Template-Type: ReDIF-Paper 1.0
Author-Name: Daniel Weinberg
Author-Name: John Abowd
Author-Name: Sandra Rowland
Author-Name: Philip Steel
Author-Name: Laura Zayatz
Title: Access Methods for United States Microdata
Abstract: Beyond the traditional methods of tabulations and public-use microdata samples, statistical agencies have developed four key alternatives for providing non-government researchers with access to confidential microdata to improve statistical modeling. The first, licensing, allows qualified researchers access to confidential microdata at their own facilities, provided certain security requirements are met. The second, statistical data enclaves, offer qualified researchers restricted access to confidential economic and demographic data at specific agency-controlled locations. Third, statistical agencies can offer remote access, through a computer interface, to the confidential data under automated or manual controls. Fourth, synthetic data developed from the original data but retaining the correlations in the original data have the potential for allowing a wide range of analyses.
Length: 34 pages
Creation-Date: 2007-08
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101798
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-25

Template-Type: ReDIF-Paper 1.0
Author-Name:  Daniel Weinberg
Title: Lessons for Targeted Program Evaluation: A Personal and Professional History of the Survey of Program Dynamics
Abstract:  The Survey of Program Dynamics (SPD) was created by the 1996 welfare reform legislation to facilitate its evaluation. This paper describes the evolution of that survey, discusses its implementation, and draws lessons for future evaluation. Large-scale surveys can be an important part of a portfolio of evaluation methods, but sufficient time must be given to data collection agencies if a high-quality longitudinal survey is expected. Such a survey must have both internal (agency) and external (policy analyst) buy-in. Investments in data analysis by agency staff, downplayed in favor of larger sample sizes given a fixed budget, could have contributed to more external acceptance. More attention up-front to reducing the potentially deleterious effects of attrition in longitudinal surveys, such as through the use of monetary incentives, might have been worthwhile. Given the problems encountered by the Census Bureau in producing the SPD, I argue that ongoing multi-purpose longitudinal surveys like the Survey of Income and Program Participation are potentially more valuable than episodic special-purpose surveys.
Length: 31 pages
Creation-Date: 2007-08
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101797
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-24

Template-Type: ReDIF-Paper 1.0
Author-Name: Joshua Angrist
Author-Name: Stacey Chen
Title: Long-Term Effects of Vietnam-Era Conscription: Schooling, Experience and Earnings
Abstract: Instrumental variables (IV) estimates using the draft lottery show that white Vietnam-era draftees suffered substantial post-service earnings losses in the 1970s and 1980s. Angrist (1990) explains these losses as due primarily to lost labor market experience. Non-public use data from the 2000 Census allow the first longerterm follow-up for a large sample from the draft-lottery cohorts. We use these data to estimate the effects of military service on earnings, schooling, and a number of other variables. Consistent with the loss-of -experience model, IV estimates of the effects of Vietnam-era service on earnings are close to zero in 2000, when the draft-lottery cohorts were middle-aged and experience profiles relatively flat. On the other hand, draft-lottery estimates show a marked increase in schooling for Vietnam-era veterans. A variety of evidence suggests this increase reflects the impact of the Vietnam-era GI Bill more than draft-avoidance behavior. The economic return to the increased schooling generated by Vietnam-era service, estimated in a wage equation that constrains the impact of Vietnam-era military service to run solely through the experience and schooling channels, appears to be less than the OLS return. Finally, we look at measures of disability. The IV estimates point to an increase in non-workrelated disability rates and non-SSA disability income, but the fact that there is no corresponding effect on employment, hours worked, or work-related disability rates suggests health was affected little by Vietnam-era service. Allowing for excess disability among veterans raises the estimated returns to GI-Bill schooling slightly.
Length: 59 pages
Creation-Date: 2007-08
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101796
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-23

Template-Type: ReDIF-Paper 1.0
Author-Name:  Julie Silva
Title: International Trade and the Changing Demand for Skilled Workers in High-Tech Manufacturing
Abstract: This paper examines the effects of changing trade pressures on the demand for skilled workers in high-tech and traditional manufacturing industry groupings and in individual high-tech sectors. For industry groupings, changing import and export prices have mixed effects, with coefficients switching signs between wage share and employment share models. These findings suggest that changes in earnings and employment of skilled workers are not moving in the same direction in response to shifting trade pressures. For individual high-tech sectors, both price and orientation measures had significant effects, but the direction of these effects varied substantially by sector.
Length: 43 pages
Creation-Date: 2007-08
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101795
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-22

Template-Type: ReDIF-Paper 1.0
Author-Name: Tetyana Shvydko
Author-Name: David Blau
Title: Labor Market Rigidities and the Employment Behavior of Older Workers
Abstract: The labor market is often asserted to be characterized by rigidities that make it difficult for older workers to carry out their desired trajectory from work to retirement. An important source of rigidity is restrictions on hours of work imposed by firms that use team production or face high fixed costs of employment. Such rigidities are difficult to measure directly. We develop a model of the labor market in which technological rigidity affects the age structure of a firms work force in equilibrium. Firms using relatively flexible technology care only about total hours of labor input, but not hours of work per worker. Older workers with a desire for short or flexible hours of work are attracted to such firms. Firms using a more rigid technology involving team production impose a minimum hours constraint, and as a result tend to have a younger age structure. A testable hypothesis of the model is that the hazard of separation of older workers is lower in firms with an older age structure. We use matched worker-firm data to test this hypothesis, and find support for it. Specification tests and alternative proxies for labor market rigidity support our interpretation of the effect of firm age structure on the separation propensity These results provide indirect but suggestive evidence of the importance of labor market rigidities.
Length: 47 pages
Creation-Date: 2007-07
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101794
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-21

Template-Type: ReDIF-Paper 1.0
Author-Name: Ronald Shadbegian
Author-Name: Randy Becker
Title: Issues and Challenges in Measuring Environmental Expenditures by U.S. Manufacturing: The Redevelopment of the PACE Survey
Abstract: The Pollution Abatement Costs and Expenditures (PACE) survey is the most comprehensive source of information on U.S. manufacturing's capital expenditures and operating costs associated with pollution abatement. In 2003, the U.S. Environmental Protection Agency began a significant initiative to redevelop the survey, guided by the advice of a multi-disciplinary workgroup consisting of economists, engineers, survey design experts, and experienced data users, in addition to incorporating feedback from key manufacturing industries. This paper describes some of these redevelopment efforts. Issues discussed include the approach to developing the new survey instrument, methods used to evaluate (and improve) its performance, innovations in sampling, and the special development and role of outside expertise. The completely redesigned PACE survey was first administered in early 2006.
Length: 32 pages
Creation-Date: 2007-07
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101793
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: survey design, survey evaluation, sampling, environmental costs, manufacturing
Handle: RePEc:cen:wpaper:07-20

Template-Type: ReDIF-Paper 1.0
Author-Name: Adriano Rampini
Author-Name: Andrea Eisfeldt
Title: Leasing, Ability to Repossess, and Debt Capacity
Abstract: This paper studies the financing role of leasing and secured lending. We argue that the benefit of leasing is that repossession of a leased asset is easier than foreclosure on the collateral of a secured loan, which implies that leasing has higher debt capacity than secured lending. However, leasing involves agency costs due to the separation of ownership and control. More financially constrained firms value the additional debt capacity more and hence lease more of their capital than less constrained firms. We provide empirical evidence consistent with this prediction. Our theory is consistent with the explanation of leasing by practitioners, namely that leasing "preserves capital," which the academic literature considers a fallacy. 
Length: 46 pages
Creation-Date: 2007-06
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101792
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: D23, D92, E22, G31, G32, G33
Keywords: leasing, secured debt, collateral, repossession, debt capacity, capital structure
Handle: RePEc:cen:wpaper:07-19

Template-Type: ReDIF-Paper 1.0
Author-Name: Lisa Lynch
Title: The Adoption and Diffusion of Organizational Innovation: Evidence for the U.S. Economy
Abstract: Using a unique longitudinal representative survey of both manufacturing and nonmanufacturing businesses in the United States during the 1990s, I examine the incidence and intensity of organizational innovation and the factors associated with investments in organizational innovation. Past profits tend to be positively associated with organizational innovation. Employers with a more external focus and broader networks to learn about best practices (as proxied by exports, benchmarking, and being part of a multi-establishment firm) are more likely to invest in organizational innovation. Investments in human capital, information technology, R&D, and physical capital appear to be complementary with investments in organizational innovation. In addition, nonunionized manufacturing plants are more likely to have invested more broadly and intensely in organizational innovation.
Length: 53 pages
Creation-Date: 2007-06
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101791
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: D2, J24, M5, O3
Keywords: organizational innovation, productivity, human capital, technological change
Handle: RePEc:cen:wpaper:07-18

Template-Type: ReDIF-Paper 1.0
Author-Name: Richard Burkhauser
Author-Name: Shuaizhang Feng
Author-Name: Stephen Jenkins
Title: Using the P90/P10 Index to Measure U.S. Inequality Trends with Current Population Survey Data: A View From Inside the Census Bureau Vaults
Abstract: The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in labor earnings and income inequality in the USA. Time-inconsistency problems related to top coding in theses data have led many researchers to use the ratio of the 90th and 10th percentiles of these distributions (P90/P10) rather than a more traditional summary measure of inequality. With access to public use and restricted-access internal CPS data, and bounding methods, we show that using P90/P10 does not completely obviate time inconsistency problems, especially for household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in labor earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure matters.
Length: 50 pages
Creation-Date: 2007-06
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101790
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: D3, J3, C8
Keywords: inequality, income, earnings, Current Population Survey, decile ratio, Gini coefficient
Handle: RePEc:cen:wpaper:07-17

Template-Type: ReDIF-Paper 1.0
Author-Name: Judith Hellerstein
Author-Name: David Neumark
Author-Name: Melissa McInerney
Title: Spatial Mismatch or Racial Mismatch?
Abstract: We contrast the spatial mismatch hypothesis with what we term the racial mismatch hypothesis - that the problem is not a lack of jobs, per se, where blacks live, but a lack of jobs into which blacks are hired, whether because of discrimination or labor market networks in which race matters. We first report new evidence on the spatial mismatch hypothesis, using data from Census Long-Form respondents. We construct direct measures of the presence of jobs in detailed geographic areas, and find that these job density measures are related to employment of black male residents in ways that would be predicted by the spatial mismatch hypothesis - in particular that spatial mismatch is primarily an issue for low-skilled black male workers. We then look at racial mismatch, by estimating the effects of job density measures that are disaggregated by race. We find that it is primarily black job density that influences black male employment, whereas white job density has little if any influence on their employment. This evidence implies that space alone plays a relatively minor role in low black male employment rates.
Length: 48 pages
Creation-Date: 2007-06
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101789
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-16

Template-Type: ReDIF-Paper 1.0
Author-Name: Judith Hellerstein
Author-Name: David Neumark
Author-Name: Melissa McInerney
Title: Changes in Workplace Segregation in the United States Between 1990 and 2000: Evidence from Matched Employer-Employee Data
Abstract: We present evidence on changes in workplace segregation by education, race, ethnicity, and sex, from 1990 to 2000. The evidence indicates that racial and ethnic segregation at the workplace level remained quite pervasive in 2000. At the same time, there was fairly substantial segregation by skill, as measured by education. Putting together the 1990 and 2000 data, we find no evidence of declines in workplace segregation by race and ethnicity; indeed, black-white segregation increased. Over this decade, segregation by education also increased. In contrast, workplace segregation by sex fell over the decade, and would have fallen by more had the services industry - a heavily female industry in which sex segregation is relatively high - not experienced rapid employment growth.
Length: 40 pages
Creation-Date: 2007-06
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101788
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: J11, J15, J16, J21, J24
Keywords: segregation, education, race, ethnicity, sex
Handle: RePEc:cen:wpaper:07-15

Template-Type: ReDIF-Paper 1.0
Author-Name: Andrew Bernard
Author-Name: J. Bradford Jensen
Author-Name: Stephen Redding
Author-Name: Peter Schott
Title: Firms in International Trade
Abstract: Standard models of international trade devote little attention to firms. Yet of the 5.5 million firms operating in the United States in 2000, just 4 percent engaged in exporting, and the top 10 percent of these exporting firms accounted for 96 percent of U.S. exports. Since the mid 1990s, a large number of empirical studies have provided a wealth of information about the important role that firms play in mediating countries imports and exports. This research, based on micro datasets that track countries production and trade at the firm level, demonstrates that trading firms differ substantially from firms that solely serve the domestic market. Across a wide range of countries and industries, exporters have been shown to be larger, more productive, more skill- and capital-intensive, and to pay higher wages than non-trading firms.2 Furthermore, these differences exist even before exporting begins. The ex ante superiority of exporters suggests self-selection: exporters are more productive, not as a result of exporting, but because only the most productive firms are able to overcome the costs of entering export markets. It is precisely this sort of microeconomic heterogeneity that grants firms the ability to influence macroeconomic outcomes. When trade policy barriers fall or transportation costs decline, high-productivity exporting firms survive and grow while lower-productivity non-exporting firms are more likely to fail. This reallocation of economic activity across firms raises aggregate productivity and provides a new source of welfare gains from trade. Confronting the challenges posed by the analysis of micro data has shifted the focus of the international trade field from countries and industries towards firms and products. We highlight these challenges with a detailed analysis of how trading firms differ from non-trading firms in the United States. We show how these differences serve as the foundation of a series of recent heterogeneous-firm models that offer new insights into the causes and consequences of international trade. We then introduce a new set of stylized facts that emerge from analysis of recently available U.S. customs data. These transaction-level trade data track all of the products imported and exported by the U.S. firms to all of its trading partners from 1992 to 2000. They show that the extensive margins of trade  that is, the number of products firms trade as well as the number of countries they trade with  are central to understanding the well-known role of distance in dampening aggregate trade flows. We conclude with suggestions for further theoretical and empirical research.
Length: 30 pages
Creation-Date: 2007-04
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101787
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-14

Template-Type: ReDIF-Paper 1.0
Author-Name: William Kerr
Author-Name: Edward Glaeser
Author-Name: Glenn Ellison
Title: What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns 
Abstract: Many industries are geographically concentrated. Many mechanisms that could account for such agglomeration have been proposed. We note that these theories make different predictions about which pairs of industries should be coagglomerated. We discuss the measurement of coagglomeration and use data from the Census Bureaus Longitudinal Research Database from 1972 to 1997 to compute pairwise coagglomeration measurements for U.S. manufacturing industries. Industry attributes are used to construct measures of the relevance of each of Marshalls three theories of industry agglomeration to each industry pair: (1) agglomeration saves transport costs by proximity to input suppliers or final consumers, (2) agglomeration allows for labor market pooling, and (3) agglomeration facilitates intellectual spillovers. We assess the importance of the theories via regressions of coagglomeration indices on these measures. Data on characteristics of corresponding industries in the United Kingdom are used as instruments. We find evidence to support each mechanism. Our results suggest that input-output dependencies are the most important factor, followed by labor pooling.
Length: 42 pages
Creation-Date: 2007-04
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101786
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: 
Handle: RePEc:cen:wpaper:07-13

Template-Type: ReDIF-Paper 1.0
Author-Name: Christine Eibner
Author-Name: Alice Zawacki
Author-Name: Elaine Zimmerman
Title: Older Workers' Access to Employer-Sponsored Retiree Health Insurance, 2000-2004
Abstract: Using a multivariate framework, we analyze recent trends in employer provision of retiree health insurance (RHI), eligibility for new retirees, and retiree contribution requirements. We also explore whether local labor market characteristics such as the unemployment rate influence RHI provision. Finally, we examine whether the Medicare Modernization Act (MMA) was associated with diverging trends in RHI access for Medicare-eligible and early retirees. Data come for the Medical Expenditure Panel SurveyInsurance Component (MEPS-IC). We find that, while RHI provision to existing retirees remained stable, eligibility for new retirees declined, and contribution requirements increased between 2000 and 2004. The local labor market had no effect on RHI provision. While early retiree coverage was more common than coverage for Medicare-eligible retirees, we did not find a divergence subsequent to MMA. These results suggest growing financial instability for retirees, both because RHI contribution requirements increased, and because businesses dropped coverage for new retirees.
Length: 37 pages
Creation-Date: 2007-04
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101785
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: retiree health insurance, employers, Medicare, aging
Handle: RePEc:cen:wpaper:07-12

Template-Type: ReDIF-Paper 1.0
Author-Name: B.K. Atrostic
Title: Measuring U.S. Innovative Activity
Abstract: Innovation has long been credited as a leading source of economic strength and vitality in the United States because it leads to new goods and services and increases productivity, leading to better living standards. Better measures of innovative activitiesactivities including but not limited to innovation alonecould improve what we know about the sources of productivity and economic growth. The U.S. Census Bureau either currently collects, or has collected, data on some measures of innovative activities, such as the diffusion of innovations and technologies, human and organizational capital, entrepreneurship and other worker and firm characteristics, and the entry and exit of businesses, that research shows affect productivity and other measures of economic performance. But developing an understanding of how those effects work requires more than just measures of innovative activity. It also requires solid statistical information about core measures of the economy: that is, comprehensive coverage of all industries, including improved measures of output and sales and additional information on inputs and purchased materials at the micro (enterprise) level for the same economic unit over time (so the effects can be measured). Filling gaps in core data would allow us to rule out the possibility that a measure of innovative activity merely proxies for something that is omitted from or measured poorly in the core data, provide more information about innovative activities, and strengthen our ability to evaluate the performance of the entire economy. These gaps can be filled by better integrating existing data and by more structured collections of new data.
Length: 32 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101784
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: innovation, productivity, economic measurement
Handle: RePEc:cen:wpaper:07-11

Template-Type: ReDIF-Paper 1.0
Author-Name: John Hipp
Title: Resident Perceptions of Crime: How Similar are They to Official Crime Rates?
Abstract: This study compares the relationship between official crime rates and residents perceptions of crime in census tracts. Employing a unique dataset that links household level data from the American Housing Survey metro samples over a period of 25 years (1976-2000) with official crime rate data for census tracts in selected cities during selected years, this large sample provides considerable ability to generalize the findings. I find that residents perception of crime is most strongly related to official rates of tract violent crime. Models simultaneously taking into account both violent and property crime consistently found that property crime actually has a negative effect on perceived crime. Among types of violent crime, the robbery rate is consistently related to higher levels of perceived crime in the tract, whereas it appears a structural shift occurred in the mid-1980s in which aggravated assault and murder rates now impact perceptions of crime, even when taking into account the robbery rate.
Length: 38 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101783
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: perceived crime, official rates of crime, violent crime, neighborhoods, longitudinal, census tract
Handle: RePEc:cen:wpaper:07-10

Template-Type: ReDIF-Paper 1.0
Author-Name: Qingfang Wang
Title: How Does Geography Matter in Ethnic Labor Market Segmentation Process? A Case Study of Chinese Immigrants in the San Francisco CMSA
Abstract: In the context of continuing influxes of large numbers of immigrants to the United States, urban labor market segmentation along the lines of race/ethnicity, gender, and class has drawn considerable growing attention. Using a confidential dataset extracted from the United States Decennial Long Form Data 2000 and a multilevel regression modeling strategy, this paper presents a case study of Chinese immigrants in the San Francisco metropolitan area. Correspondent with the highly segregated nature of the labor market as between Chinese immigrant men and women, different socioeconomic characteristics at the census tract level are significantly related to their occupational segregation. This suggests the social process of labor market segmentation is contingent on the immigrant geography of residence and workplace. With different direction and magnitude of the spatial contingency between men and women in the labor market, residency in Chinese immigrant concentrated areas is perpetuating the gender occupational segregation by skill level. Whereas abundant ethnic resources may exist in ethnic neighborhoods and enclaves for certain types of employment opportunities, these resources do not necessarily help Chinese immigrant workers, especially women, to move upward along the labor market hierarchy.
Length: 44 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101782
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords: Chinese immigrants, ethnic niches, gender, residence, workplace, San Francisco
Handle: RePEc:cen:wpaper:07-09

Template-Type: ReDIF-Paper 1.0
Author-Name: Michael Ollinger
Author-Name: Sang Nguyen
Title: Mergers and Acquisitions, Employment, Wages and Plant Closures in the U.S. Meat Product Industries: Evidence from Micro Data
Abstract: The purpose of this paper is to evaluate the impact of mergers and acquisitions (M&As) on wages and employment and plant closures in the meat packing, prepared meat products, and poultry slaughter and processing industries over 1977-87 and 1982-92. The analysis relies on a balanced panel dataset of all plants owned by meat and poultry firms that existed over 1977-87 or 1982-92. We find that (1) M&As are positively associated with wages in the meat packing and prepared meat products industries over 1977-87, but not over 1982-92; (2) changes in employment are positively related to M&As in all three meat and poultry industries over 1977-87, but only in the poultry industry over 1982-92; and (3) M&As are negatively associated with plant closures.
Length: 25 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101781
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: J63
Keywords: mergers and acquisitions, wages, employment, meat industry, poultry industry
Handle: RePEc:cen:wpaper:07-08

Template-Type: ReDIF-Paper 1.0
Author-Name: Gale Boyd
Title: Estimating the Distribution of Plant-Level Manufacturing Energy Efficiency with Stochastic Frontier Regression
Abstract: A feature commonly used to distinguish between parametric/statistical models and engineering models is that engineering models explicitly represent best practice technologies while the parametric/statistical models are typically based on average practice. Measures of energy intensity based on average practice are less useful in the corporate management of energy or for public policy goal setting. In the context of company or plant level energy management, it is more useful to have a measure of energy intensity capable of representing where a company or plant lies within a distribution of performance. In other words, is the performance close (or far) from the industry best practice? This paper presents a parametric/statistical approach that can be used to measure best practice, thereby providing a measure of the difference, or efficiency gap at a plant, company or overall industry level. The approach requires plant level data and applies a stochastic frontier regression analysis to energy use. Stochastic frontier regression analysis separates the energy intensity into three components, systematic effects, inefficiency, and statistical (random) error. The stochastic frontier can be viewed as a sub-vector input distance function. One advantage of this approach is that physical product mix can be included in the distance function, avoiding the problem of aggregating output to define a single energy/output ratio to measure energy intensity. The paper outlines the methods and gives an example of the analysis conducted for a non-public micro-dataset of wet corn refining plants.
Length: 18 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101780
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:07-07

Template-Type: ReDIF-Paper 1.0
Author-Name: Yoonsoo Lee
Title: Geographic Redistribution of the U.S. Manufacturing and The Role of State Development Policy
Abstract: Competition among state and local governments to lure businesses has attracted considerable interest from economists, as well as legislators and policy makers. This paper quantifies the role of plant relocations in the geographic redistribution of manufacturing employment and examines the effectiveness of state development policy. Only a few studies have looked at how manufacturing firms locate their production facilities geographically; they have used either small manufacturing samples or small geographic regions. This paper provides broader evidence of the impact of plant relocations using confidential establishment level data from the U.S. Census Longitudinal Research Database (LRD), covering the full population of manufacturing establishments in the United States over the period from 1972 to 1992. This paper finds a relatively small role for relocation in explaining the disparity of manufacturing employment growth rates across states. Moreover, it finds evidence of very weak effects of incentive programs on plant relocations.
Length: 41 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101779
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: J23, H25, H73, R58
Keywords: entry, exit, relocation, tax incentive
Handle: RePEc:cen:wpaper:07-06

Template-Type: ReDIF-Paper 1.0
Author-Name: Yoonsoo Lee
Title: The Importance of Reallocations in Cyclical Productivity and Returns to Scale: Evidence from Plant-Level Data
Abstract: This paper provides new evidence that estimates based on aggregate data will understate the true procyclicality of total factor productivity. I examine plant-level data and show that some industries experience countercyclical reallocations of output shares among firms at different points in the business cycle, so that during recessions, less productive firms produce less of the total output, but during expansions they produce more. These reallocations cause overall productivity to rise during recessions, and do not reflect the actual path of productivity of a representative firm over the course of the business cycle. Such an effect (sometimes called the cleansing effect of recessions) may also bias aggregate estimates of returns to scale and help explain why decreasing returns to scale are found at the industry-level data.
Length: 28 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101778
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: D24, E32, O47
Keywords: Entry, Exit, Productivity, Returns to Scale
Handle: RePEc:cen:wpaper:07-05

Template-Type: ReDIF-Paper 1.0
Author-Name: William Kerr
Author-Name: Adriana Kugler
Author-Name: David Autor
Title: Do Employment Protections Reduce Productivity? Evidence from U.S. States
Abstract: Theory predicts that mandated employment protections may reduce productivity by distorting production choices. Firms facing (non-Coasean) worker dismissal costs will curtail hiring below efficient levels and retain unproductive workers, both of which should affect productivity. These theoretical predictions have rarely been tested. We use the adoption of wrongful discharge protections by U.S. state courts over the last three decades to evaluate the link between dismissal costs and productivity. Drawing on establishment-level data from the Annual Survey of Manufacturers and the Longitudinal Business Database, our estimates suggest that wrongful discharge protections reduce employment flows and firm entry rates. Moreover, analysis of plant-level data provides evidence of capital deepening and a decline in total factor productivity following the introduction of wrongful discharge protections. This last result is potentially quite important, suggesting that mandated employment protections reduce productive efficiency as theory would suggest. However, our analysis also presents some puzzles including, most significantly, evidence of strong employment growth following adoption of dismissal protections. In light of these puzzles, we read our findings as suggestive but tentative.
Length: 48 pages
Creation-Date: 2007-03
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101777
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL: J11, J21, J31, J61
Keywords: Dismissal Costs, Employment Fluctuations, Entry and Exit, Labor Productivity, TFP, Entrepreneurship
Handle: RePEc:cen:wpaper:07-04

Template-Type: ReDIF-Paper 1.0
Author-Name: Patrick Bayer
Author-Name: Stephen Ross
Title: Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application 
Abstract: Researchers have long recognized that the non-random sorting of individuals into groups generates correlation between individual and group attributes that is likely to bias naive estimates of both individual and group effects. This paper proposes a non-parametric strategy for identifying these effects in a model that allows for both individual and group unobservables, applying this strategy to the estimation of neighborhood effects on labor market outcomes. The first part of this strategy is guided by a robust feature of the equilibrium in the canonical vertical sorting model of Epple and Platt (1998), that there is a monotonic relationship between neighborhood housing prices and neighborhood quality. This implies that under certain conditions a non-parametric function of neighborhood housing prices serves as a suitable control function for the neighborhood unobservable in the labor market outcome regression. This control function converts the problem to a model with one unobservable so that traditional instrumental variables solutions may be applied. In our application, we instrument for each individual.s observed neighborhood attributes with the average neighborhood attributes of a set of observationally identical individuals. The neighborhood effects model is estimated using confidential microdata from the 1990 Decennial Census for the Boston MSA. The results imply that the direct effects of geographic proximity to jobs, neighborhood poverty rates, and average neighborhood education are substantially larger than the conditional correlations identified using OLS, although the net effect of neighborhood quality on labor market outcomes remains small. These findings are robust across a wide variety of specifications and robustness checks.
Length: 45 pages
Creation-Date: 2007-01
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101776
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:07-03

Template-Type: ReDIF-Paper 1.0
Author-Name: Judith Hellerstein
Author-Name: David Neumark
Title: Workplace Segregation in the United States: Race, Ethnicity, and Skill 
Abstract: We study workplace segregation in the United States using a unique matched employer employee data set that we have created. We present measures of workplace segregation by education and language, and by race and ethnicity, and . since skill is often correlated with race and ethnicity we assess the role of education- and language-related skill differentials in generating workplace segregation by race and ethnicity. We define segregation based on the extent to which workers are more or less likely to be in workplaces with members of the same group, and we measure segregation as the observed percentage relative to maximum segregation. Our results indicate that there is considerable segregation by education and language in the workplace. Among whites, for example, observed segregation by education is 17% (of the maximum), and for Hispanics, observed segregation by language ability is 29%. Racial (blackwhite) segregation in the workplace is of a similar magnitude to education segregation (14%), and ethnic (Hispanic-white) segregation is somewhat higher (20%). Only a tiny portion (3%) of racial segregation in the workplace is driven by education differences between blacks and whites, but a substantial fraction of ethnic segregation in the workplace (32%) can be attributed to differences in language proficiency. Finally, additional evidence suggests that segregation by language likely reflects complementarity among workers speaking the same language. 
Length: 52 pages
Creation-Date: 2007-01
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101773
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:07-02

Template-Type: ReDIF-Paper 1.0
Author-Name: Thomas Hubbard
Author-Name: Luis Garicano
Title: The Return to Knowledge Hierarchies
Abstract: Hierarchies allow individuals to leverage their knowledge through others. time. This mechanism increases productivity and amplifies the impact of skill heterogeneity on earnings inequality. To quantify this effect, we analyze the earnings and organization of U.S. lawyers and use the equilibrium model of knowledge hierarchies in Garicano and Rossi-Hansberg (2006) to assess how much lawyers, productivity and the distribution of earnings across lawyers reflects lawyers. ability to organize problem-solving hierarchically. We analyze earnings, organizational, and assignment patterns and show that they are generally consistent with the main predictions of the model. We then use these data to estimate the model. Our estimates imply that hierarchical production leads to at least a 30% increase in production in this industry, relative to a situation where lawyers within the same office do not vertically specialize. We further find that it amplifies earnings inequality, increasing the ratio between the 95th and 50th percentiles from 3.7 to 4.8. We conclude that the impact of hierarchy on productivity and earnings distributions in this industry is substantial but not dramatic, reflecting the fact that the problems lawyers face are diverse and that the solutions tend to be customized.
Length: 65 pages
Creation-Date: 2007-01
Publication-Status:
File-URL: http://webserver01.ces.census.gov/index.php/ces/1.00/cespapers?down_key=101772
File-Format: Application/pdf
File-Function: First version, 2007
Classification-JEL:
Keywords:
Handle: RePEc:cen:wpaper:07-01