Title: What's driving the new economy
Description: "Using a unique nationally representative sample of U.S.  establishments surveyed in both 1993 and 1996, we examine the relationship between workplace innovations and establishment productivity and wages.  Using both cross-sectional and longitudinal data, we find evidence that high-performance workplace practices are associated with both higher productivity and higher wages.  Specifically, we find a positive and significant relationship between the proportion of non-managers using computers and the productivity of establishments.  We find that firms re-engineer their workplaces and incorporate more high-performance practices experience higher productivity.  For example, profit sharing is associated with increased productivity, and employee voice has a large positive effect on productivity when it is implemented in the context of unionized establishments.  These workplace practices appear to explain a large part of the movement in multifactor productivity over the 1993-96 period.  When we examine the determinants of wages within these establishments, we find that re-engineering a workplace to incorporate more high-performance practices leads to higher wages.  However, increasing the usage of profit sharing results in lower regular pay for workers, especially technical workers and clerical/sales workers.  Finally, increasing the percentage of workers meeting regularly in groups has a larger positive effect on wages in unionized establishments"--Federal Reserve Bank of New York web site.
Subjects: Automation, Econometric models, Econometric models.., Effect of technological innovations on, Industrial management, Industrial productivity, Labor unions, Wages, Econometric models. .
Places: United States