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Large firms and the cyclicality of US labour productivity

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  • Brault, Joshua
  • Khan, Hashmat

Abstract

We present novel stylized facts on the declining cyclicality of labour productivity for large firms. Changes in their output-labour productivity correlations mirror those in aggregate US data. Large firms account for 88% of the aggregate labour productivity-output correlation post-1985. The decline in cyclicality aligns with their increased use of extensive margin adjustments, such as hiring more workers. For a 1% output increase, large firms hire 75 additional workers pre-1985, compared to 90 post-1985. Our findings are relevant to the literature on the role of large firms in US business cycles.

Suggested Citation

  • Brault, Joshua & Khan, Hashmat, 2024. "Large firms and the cyclicality of US labour productivity," Journal of Macroeconomics, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:jmacro:v:82:y:2024:i:c:s0164070424000570
    DOI: 10.1016/j.jmacro.2024.103643
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    More about this item

    Keywords

    Large firms; Labour productivity; Business cycles;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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