Average Labor Productivity Research Articles

The relationship between labor productivity and number of operating firms

This paper constructs a theoretical model matching empirically observed relationships between average labor productivity and the number of operating firms. The models in the related literature which utilize CES utility function find no relationship between average labor productivity and the number of operating firms in the economy (Melitz, Marc J. [2003. “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity.” Econometrica 71 (6): 1695–1725] and many versions of this model). Moreover, the models which utilize non-homothetic preferences with a numeraire good find a positive relationship between average labor productivity and the number of operating firms (Melitz, Marc, and Gianmarco I. P. Ottaviano [2008. “Market Size, Trade, and Productivity.” Review of Economic Studies 75: 295–316] and many versions of this model). However, the model developed in this paper provides a single theoretical framework that depending on the source, a rise in the average labor productivity may lead to an increase or a decrease in the number of operating firms. In line with our results, we provide empirical evidence from ten European countries for the 2008–2016 period, which shows that the correlation between these two variables is positive for some of the countries, while negative for the others.

A General Equilibrium Assessment of COVID-19’s Labor Productivity Impacts on China’s Regional Economies

This study introduces a database that can be used to analyze COVID19’s impacts on China’s regional economies. This database contains various sectoral and regional economic outcomes at the weekly and monthly level. In the context of a general equilibrium trade model, we first formulate a mathematical representation of the Chinese regional economy and calibrate the model with China’s multiregional input-output table. We then utilize the monthly provincial and sectoral value-added and national trade series to estimate COVID-19’s province-by-month labor-productivity impacts from February 2020 to September 2020. Compared to February 2019 levels, we find an average 39.5% decrease in labor productivity (equivalent to around 305 million jobs) and an average 25.9% decrease in welfare across provinces in February 2020. Both labor productivity and welfare have recovered quickly since April 2020. As of September 2020, average provincial labor productivity increased by 12.2% (equivalent to around 94 million jobs) and average welfare increased by 8.2% relative to their September 2019 levels.

Contract Labor and Firm Growth in India

India's Industrial Disputes Act (IDA) of 1947 requires firm with more than 100 workers to pay large costs if they shrink their employment. Since the early 2000s, large Indian manufacturing firms have increasingly relied on contract workers who are not subject to the IDA. By 2015, contract workers accounted for 38% of total employment at firms with more than 100 workers compared to 20% in 2000. Over the same time period, the thickness of the right tail of the firm size distribution in formal Indian manufacturing plants increased, the average product of labor for large firms declined, the job creation rate for large firms increased, and the probability that large firms introduce new products rose. We provide evidence that these outcomes were caused by an increased reliance on contract labor among large establishments. A model of firm growth subject to firing costs suggests the rise of contract labor increased TFP in Indian manufacturing by 7.6%, occurring all through a one-time reduction in misallocation between large and small firms with negligible change in the long-run growth rate.

Contract Labor and Firm Growth in India

India's Industrial Disputes Act (IDA) of 1947 requires firm with more than 100 workers to pay large costs if they shrink their employment. Since the early 2000s, large Indian manufacturing firms have increasingly relied on contract workers who are not subject to the IDA. By 2015, contract workers accounted for 38% of total employment at firms with more than 100 workers compared to 20% in 2000. Over the same time period, the thickness of the right tail of the firm size distribution in formal Indian manufacturing plants increased, the average product of labor for large firms declined, the job creation rate for large firms increased, and the probability that large firms introduce new products rose. We provide evidence that these outcomes were caused by an increased reliance on contract labor among large establishments. A model of firm growth subject to firing costs suggests the rise of contract labor increased TFP in Indian manufacturing by 7.6%, occurring all through a one-time reduction in misallocation between large and small firms with negligible change in the long-run growth rate.

Performance Pay and Risk Sharing between Firms and Workers

Using data from Glassdoor, we show that firms transmit productivity shocks to workers through performance pay. Performance pay responds more than base to industry shocks, falling (rising) 17% in Finance (Information Technology) after the recent financial crisis. At the regional level, performance pay is 7--10x more procyclical than base pay, and this procyclicality is strongest among larger firms in tradable industries. Idiosyncratic shocks to annual firm performance also pass through to bonuses, with a one-standard-deviation increase in average labor productivity raising performance pay by 5%. We rationalize these results in a model of risk sharing between a worker with limited commitment and a risk-averse firm. Consistent with our theory, performance pay usage is associated with increased earnings variance for workers, but lower volatility of firm sales, employment, and productivity growth. Interestingly, it is also associated with faster productivity growth, suggesting that incorporating performance-based compensation may help improve firm performance.

Small business development and resource use in Russian regions

Relevance. The living standards in any country largely depend on how developed is this country’s business sector. The latter, in its turn, relies on the availability and efficient use of resources. The problem that arises in this respect and that this study seeks to address is how to measure the resource potential available for the development of small businesses in order to choose the optimal strategy of stimulating this sector for this or that region. Research objective. The aim of this research is to study resources available to small businesses and their use in Russian regions. Data and methods. The set of indicators used in our analysis helps us measure the activity of small businesses in Russian federal districts. The key elements of the assessment are based on the official statistics and include the following: average labor productivity of small businesses, the unit turnover per small enterprise, the number of small firms per 10,000 people. Each of these indicators was analyzed by using the methods of mathematical statistics according to the three criteria: stability (S); average values (M); and the variability of the results (V), which characterizes interregional differentiation within a federal district/country. Results. The article proposes a system of indicators for diagnosing small business development based on the concentration and performance of small-sized enterprises. The quantitative results of such analysis can be used for choosing strategies of small business development. Conclusion. There was a significant decline in entrepreneurial activity during the post-crisis period of 2017-2018 in Russia, which could be explained by the impact of foreign sanctions and the difficult economic situation in the country (inflation, a sharp rise in the price of resources, difficulties in communication with international partners, and the difficulty or even impossibility to adopt efficient technologies in a short time). As our analysis has shown, some of the Russian territories still have underutilized resource potential that can be used for stimulating small business development.

Enterprise systems as a condition of modern companies’ labor productivity growth

The article considers the dynamics of changes in average labor productivity in Ukraine and Central Asia, Southeast Europe, Russia from 2006 to 2014. Comparing with the same indicator of the United States shows a significant lag on this indicator. Studies prove the existence of a strong correlation between the quality of management and performance of the enterprise, including the level of labor productivity. The need for priority use of organizational and managerial innovations that are more efficient and effective at this stage of development of our country is proved. This is due to the fact that, because to the imperfections of governance in our country, the impact of technological innovation used is significantly reduced. It is found that domestic enterprises both in Ukraine and in the Odessa region, in particular, do not consider organizational innovations as an effective factor in the growth of their level of productivity and competitiveness. It is proposed to use enterprise systems as an option in the organizational and management innovations that can significantly improve the quality of decisions made by company management and will improve its main technical and economic indicators.

Is there evidence for statistical discrimination against ethnic minorities in hiring? Evidence from a cross-national field experiment

While statistical discrimination theory is often proposed as an important explanation for ethnic discrimination in hiring, research that empirically scrutinizes its underlying assumptions is scant. To test these assumptions, we combine data from a cross-national field experiment with secondary data indicative of the average labor productivity of ethnic communities. We find little evidence that adding diagnostic personal information reduces discrimination against ethnic minorities. Furthermore, we do not find an association between language similarity or the socioeconomic resources of the ethnic community and hiring discrimination. However, our findings show that discrimination is related to the socioeconomic development of the country of ancestry. Finally, the impact of these indicators of group productivity is generally not moderated by the amount of diagnostic personal information. Taken together, these findings question several core assumptions of statistical discrimination theory.

Rush hours and urbanization

We use a quantitative spatial general equilibrium model with potential commuting of workers to analyze the effects of rush hours on the spatial allocation of employment and population, the housing market, average labor productivity and welfare. We construct a measure of traffic congestion based on commuting time data for German districts in 2018 and use the model to quantify efficiency and welfare costs of rush hours. Reducing time lost in traffic by 50 percent raises the urbanization rate by 3.7 percentage points, average labor productivity by 0.8 percent and welfare by 3.5 percent. We also compare the role of commuting costs and housing markets as two major congestion forces with regard to urbanization, productivity, and welfare.

Regional wage and productivity in Italy: a spatio-temporal analysis

ABSTRACT This paper analyses the empirical functioning of the regional labour market in Italy (21 Italian regions over the period 1995–2015). Starting from centralized union bargaining, it derives a micro-founded theoretical long-run relationship between the nominal wage per worker and average labour productivity. The long-run equation is then empirically verified using cointegration analysis, controlling for time and space dependence. It is found that labour productivity has a positive impact on determining the nominal wage per worker. The magnitude of the impact is, on average, 0.28 when considering both direct and indirect (spillover) effects. According to the results, regional policies aimed at reducing local disparities must foster labour productivity, particularly in the south of the country.

Impact of macroeconomic factors on the competitiveness of national economies

The competitiveness of the national economy is one of the most important economic concepts.There are many of its definitions and methods of measurement. Since the country’s competitiveness isformed by a huge number of factors, a literature review was carried out, as a result of which macroeconomicfactors affecting the competitiveness of the economy were selected. The purpose of the articleis to assess the degree of influence of selected factors on the global competitiveness of countries. Forthis, panel data of 60 countries for the period from 2006 to 2018 were collected. Based on this data,a regression analysis of panel data with fixed and random effects was carried out, where the dependentvariable is the Global Competitiveness Index, and 22 macroeconomic factors act as independentvariables. The Hausman test confirmed the preference for using a panel data model with fixed effectsover a panel data model with random effects. As a result, 2 models were constructed that showed thedegree of influence of the following factors to change the global competitiveness index: gross capitalformation, total factor productivity, average labor productivity, pace of inflation rate, share of the currentaccount balance in GDP, share of the employed population in the total population of the country,oil prices, growth rate of oil prices.

ИНТЕГРАЛЬНАЯ ОЦЕНКА ПРОИЗВОДИТЕЛЬНОСТИ ТРУДА

To assess the level and dynamics of labor productivity, quite a lot of different indicators are used, which complicates the process of analysis and monitoring. Often they have multidirectional trends and meanings, which makes it difficult to formulate recommendations for increasing labor productivity. To smooth out these differences, it is necessary to conduct an integrated assessment of labor efficiency. The purpose of our study is to evaluate the productivity of agricultural labor in the municipal regions of Ulyanovsk region on the basis of an integral indicator to identify areas of leaders and outsiders. The evaluation was carried out using two methods based on the calculation of various indices. The value of the integral indicator of labor productivity, which was determined taking into account the indices of productivity, intensity and productivity, in the municipal districts of Ulyanovsk region varied from -0.01 in the Baryshsky District (negative value) to 3.5 in Ulyanovsk district. According to the results of ranking and differentiation according to integral assessment, the group with high and average labor productivity (IPT ≥ 0.76) included six regions, or only 30% of the study population. In half of the districts, its low level was noted (IPT 0.1 ... 0.76), labor is inefficient in four districts of the region. The leading regions in labor productivity are Tsilninsky and Ulyanovskiy (IPT ≥1.5), outsiders are Baryshskiy, Inzenskiy and Starokulatkinskiy (IPT ≤ 0.1). An integrated assessment of the level of labor productivity can be used to develop recommendations for its increase for areas lagging behind industry average indicators and leading regions in their development

Labor Productivity Loss in Case of Death in Thailand

Purpose: This study aims to analyze the loss of labor productivity in the case of death in Thailand by measuring the average product of labor to assess the impact of the significant labor loss on the national economy. Methodology/Approach: To analyze the labor productivity loss in Thailand caused by death, this research uses secondary data matched with suitable models to assess the labor situation in Thailand, both now and in the future. Findings: The results of this study show that the total labor productivity loss in the case of death equated to about half a trillion baht in 2014 and more than 0.6 trillion baht in 2018, representing an increase of about 7.75%. The labor productivity loss in 2018 accounted for 5.81% of GDP and the accumulated value from 2014–2018 equated to more than 28% of GDP. This illustrates that the problem of significant labor loss in Thailand is becoming more important and needs to be resolved. Practical implications: The results of this study highlight the importance of labor loss and government investment in public health, solving crime, and accident avoidance to reduce labor productivity loss. Appropriate policies can help alleviate the situation. Originality/Value: This study analyzes the value of labor productivity loss in Thailand, raising awareness concerning the importance of the current situation and provides a foundation for properly addressing the issue.

Labor market search, endogenous disasters and the equity premium puzzle

The present paper investigates: (i) the endogenous disaster mechanism in a textbook search-and-matching model when calibrated with a constant flow value of unemployment that is close to average labor productivity and (ii) its contribution to solve the equity premium puzzle.I offer a simple explanation for the core of the disaster mechanism: the lower bound—say Xkink—on the annuitized costs the firm incurs from investing in a match lies sufficiently close to the body of productivity’s distribution. If labor productivity drops close to, or even below Xkink for consecutive periods, the firm’s annuitized share in expected future productivity of a worker can either only barely, or even no longer at all break even the annuitized lower bound of the costs the firm faces. Vacancies become unprofitable and the economy quickly enters a downward spiral. The core of the mechanism relies critically on an unreasonably high and constant flow value of unemployment. Disasters disappear entirely for slightly smaller or procyclical values and the effects cannot be compensated by empirically plausible adjustments of the model’s remaining parameters.While the model can generate a sizeable equity premium combined with a small risk-free rate if the flow value of unemployment is large and constant and if the coefficient of relative risk aversion and the elasticity of intertemporal substitution are both high, premia again collapse by an order of magnitude in the versions of the model without disasters.

A global analysis of heat-related labour productivity losses under climate change\u2014implications for Germany\u2019s foreign trade

We investigate climate change impacts transferred via foreign trade to Germany, a country that is heavily engaged in international trade. Specifically, we look at temperature changes and the associated labour productivity losses at a global scale until 2050. We assess the effects on Germany’s imports and exports by means of a global computable general equilibrium (CGE) model. To address uncertainty, we account for three Shared Socioeconomic Pathways (SSP1, SSP2 and SSP3) and two Representative Concentration Pathways (RCP4.5 and RCP8.5) using projections from five global climate models. We find that average annual labour productivity for high intensity work declines by up to 31% for RCP4.5 (and up to 38% for RCP8.5) in Southeast Asia and the Middle East by 2050, all relative to a 2050 baseline without climate change. As a consequence, for RCP8.5, Germany’s imports from regions outside Europe are lower by up to 2.46%, while imports from within Europe partly compensate this reduction. Also, Germany’s exports to regions outside Europe are lower, but total exports increase by up to 0.16% due to higher exports to EU regions. Germany’s GDP and welfare, however, are negatively affected with a loss of up to − 0.41% and − 0.46%, respectively. The results highlight that overall positive trade effects for Germany constitute a comparative improvement rather than an absolute gain with climate change.

Using cluster analysis methods to forecast the investment development of agricultural sector enterprises

Purpose. The aim of the article is substantiation and use of cluster analysis methods for forecasting investment development of agricultural sector enterprises. Methodology of research. The theoretical and methodological basis of the article is the fundamental provisions of modern economics. The following methods are used in the process of research: analysis and synthesis – to study the object and subject of research; grouping, abstract and logical – for theoretical generalizations of research results and formulation of conclusions; tools of econometric modelling: method of cluster analysis, constructive and strategic forecasting – in the study of the state of the agricultural sector, substantiation of the directions of cluster formation, forecasting trends in the agricultural sector for the future; statistical analysis and generalization – to process an array of statistical and empirical data and formulate the relevant conclusions of the conducted study. Findings. The need to model the conditions associated with investment in an unstable external environment of the agricultural sector. The application of cluster analysis to study the state of the agricultural sector is proposed. The use of econometric modelling tools – methods of statistical analysis for forecasting the development of agricultural enterprises is substantiated. The cost of investments in agriculture of Ukraine is analysed. Originality. Recommendations for wider use of econometric modelling tools to ensure the process of planning and forecasting the development of the agricultural sector of the economy have been deepened. The scientific and methodological approach to forecasting the development of the agricultural sector for the future has been improved with the help of cluster analysis tools, which confirmed the rational use of territorial distribution by regions and growth of investment capacity of agricultural production and average labour productivity. Practical value. The obtained results of the study allowed to systematize the factors that most affect the results of financial and economic activities, and to identify three scenarios of agricultural production in clusters (in homogeneous groups of regions): realistic, optimistic and pessimistic forecasts, identify alternative trajectories of agricultural sector, compare forecasting volumes of agricultural production with domestic needs and estimate export growth. Key words: agricultural sector, investment support, methods of cluster analysis, investment development forecasting, cluster, scenarios of agricultural production development.

Labor Productivity of Gypsum Plastering in Sulaimani City’s Projects

In this study the labor productivity (LP) and the effects of main factors on LP in building projects in Sulaimani City practically on field sites were investigated for gypsum plastering (GP) works. Accordingly, the most important effective factors on LP were, height(h), number of skilled laborers (SkL) and Crew size (Cz). 30 practical data on field sites were practically observed.
 The results showed that the minimum and maximum LP were between 10.53 and 23.73 m2/hr. The average LP was 15.2 m2/hr., while h=0-3 m, SkL=1-2 laborers and Cz=2-4 laborers. The study investigated that the h, SkL and Cz had a direct effect on LP, while it is found that the age and experience of laborers had a slight effect on LP. A model with a significant relation R 2 97.5% with the factors was found to predict the LP for gypsum plastering.

СКЛАДНІСТЬ АЛГОРИТМУ ОЦІНЮВАННЯ ФУНКЦІОНАЛЬНОЇ БЕЗПЕКИ ІНФОРМАЦІЙНИХ ТЕХНОЛОГІЙ ДЛЯ СТВОРЕННЯ ГАРАНТОЗДАТНИХ АВТОМАТИЗОВАНИХ СИСТЕМ

The complexity of the algorithm of communication of the system of linear levels with open regular parts by means of list decoding of "shortened" codes of reed painters which are intended for use in methods of an estimation of functional safety of cryptographic algorithms of cryptographic subsystems of the guaranteed automated systems creating on objects of critical infrastructure and socially important objects. This paper proposes solving problems to assess the complexity of the proposed algorithm. As a result, the upper estimates of the average labor productivity for the general case and the maximum complexity of the proposed algorithm for many special reviews related to the restoration of the formed linear results of the maximum period over a field of two elements. The achievable upper part of the list, which is formed using the proposed algorithm, is also indicated. The obtained results indicate that with certain collaborations between the parameters of the previously proposed algorithm, the time complexity was changed in comparison with the previously known deterministic algorithm for a similar purpose, which is based on the fast Hadamara transformation. This means that a more effective tool can be used to assess the impact of cryptographic subsystems on powerful cyberattacks to obtain a more accurate assessment of their functional security.

Where Are Your Ethics? How Corporate Scandals Hurt Employees

Using a sample of corporate scandals and data from the website Glassdoor, we study how negative reputation shocks affect the relationship between firms and their employees. Worker sentiment declines sharply and persistently following scandals, driven by diminished perceptions of management and culture. While base earnings and fringe benefits remain unchanged, variable compensation falls 6 percent, with less-experienced workers bearing the largest reductions. Consistent with the decreases in job satisfaction and compensation, we find that average labor productivity drops and that firms may face more difficulty filling job vacancies. Our results demonstrate that rank-and-file employees are adversely impacted by corporate misconduct.

Produtividade e heterogeneidade na estrutura produtiva da indústria de transformação no Brasil

Este artigo apresenta um panorama da produtividade média do trabalho na indústria de transformação com ênfase na heterogeneidade estrutural e traz algumas discussões sobre o desempenho da produtividade e sua relação com o processo de desindustrialização ocorrida nas últimas décadas. Dada as divergentes opiniões sobre como e a importância de ‘re-industrializar’ o país, o presente artigo contribui para o debate atual sobre a heterogeneidade na estrutura produtiva brasileira e sobre a redução da participação da indústria de transformação na economia brasileira. Foi apresentada a contribuição de cada setor para o nível de produtividade média nacional do trabalho de forma a contribuir na tomada de decisão dos gestores quanto à geração de emprego e renda na economia.