Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)
- Chair: Lucy Eldridge, U.S. Bureau of Labor Statistics
Firm Dynamics and Local Economic Shocks: Evidence from the Shale Oil and Gas Boom
AbstractEmpirical evidence and models of firm dynamics ascribe an important job creation role to new businesses and a particular sensitivity of young firms to economic shocks. Studying the role of entrepreneurs and new businesses in the economy's response to economic shocks is difficult due to the complicated causal connections between economic growth and firm entry. The recent revolution in shale oil and gas extraction – which created rapid, large gains in economic activity in areas possessing certain geological characteristics – presents a unique opportunity to study the response of firms – both new and existing – to an expansion of economic conditions. Using a diff-in-diff research design, we show that establishment entry accounts for most of the employment growth in shale regions. New firms and new establishments of existing firms account for about a quarter and three quarters of the increased annual aggregate growth rates, respectively, relative to plausible counterfactuals; cumulatively, establishments that opened after the shale boom began account for three quarters of total net employment gains from 2007 to 2014, and new firms comprise the majority of the cumulative growth from new establishments. These results have important implications for theories of firm dynamics.
Knowledge Capital and U.S. State-Level Differences in Labor Productivity
AbstractHanushek, Ruhose, and Woessmann used income measures to analyze the impact of knowledge capital on state-level economic development. Recently published experimental state-level labor productivity measures from the U.S. Bureau of Labor Statistics provide the opportunity to extend their analysis to labor productivity. We find that in 2017, 12 percent of the dispersion in labor productivity levels is attributable to variation in knowledge capital. We also find that over the post-Great Recession period (2009–2017), initial knowledge capital is positively correlated with productivity growth: increasing test scores by one standard deviation is associated with a 1.6-percentage-point-faster average annual productivity growth rate.
- F0 - General
- J0 - General