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Making Do With Less: Working Harder During Recessions

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  • Edward P. Lazear
  • Kathryn L. Shaw
  • Christopher Stanton

Abstract

Why did productivity rise during recent recessions? One possibility is that average worker quality increased. A second is that each incumbent worker produced more. The second effect is termed "making do with less." Using data from 2006 to 2010 on individual worker productivity from a large firm, these effects can be measured and separated. For this firm, most of the gain in productivity during the recession was a result of increased effort. Additionally, the increase in effort is correlated with the increase in the local unemployment rate, presumably reflecting the costs of losing a job.

Suggested Citation

  • Edward P. Lazear & Kathryn L. Shaw & Christopher Stanton, 2014. "Making Do With Less: Working Harder During Recessions," CEP Discussion Papers dp1321, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1321
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Recession; productivity; sorting;
    All these keywords.

    JEL classification:

    • M50 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - General
    • D20 - Microeconomics - - Production and Organizations - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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