AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
The Productivity Paradox in US Manufacturing: A Firm- and Industry-Level Perspective
AEA Papers and Proceedings
(pp. 462–468)
Abstract
US manufacturing productivity growth grew rapidly in the 1987–2007 period but has been nearly zero since 2010. We decompose this productivity slowdown across industries and firms and find it to be pervasive. More specifically, it appears in the initially fastest growing industries (including Computer and Electronic Products) just as in initially lagging ones, and it affects both leading and following firms within industries. This broad-based decline occurred even as R&D intensity rose, suggesting declining research effectiveness rather than reduced innovation effort. Our firm-level analysis reveals this productivity paradox operates broadly rather than being concentrated among specific firm types or industries.Citation
Lashkari, Danial, and Jeremy Pearce. 2026. "The Productivity Paradox in US Manufacturing: A Firm- and Industry-Level Perspective." AEA Papers and Proceedings 116: 462–468. DOI: 10.1257/pandp.20261044Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- L60 Industry Studies: Manufacturing: General
- O31 Innovation and Invention: Processes and Incentives