Procyclical labour productivity: A closer look at a stylized fact

Citation

Hart RA & Malley JR (1999) Procyclical labour productivity: A closer look at a stylized fact. Economica, 66 (264), pp. 533-550. https://doi.org/10.1111/1468-0335.00187

Abstract
At 4-digit United States manufacturing industry level, we find evidence suggesting that thestylized fact of procyclical labour productivity should be treated with great caution. We usethe NBER Manufacturing Productivity database to investigate the relationship betweenhourly labour productivity and real output for 450 industries for the years 1958-91. Labourproductivity is significantly procyclical in 63% of industries and acyclical in 36%. In the latterrespect, a high proportion of investment goods industries display acyclical productivity.Cross-section regressions are carried out that seek to explain the interindustry distribution ofcyclicality. The analysis attributes a significant role to variations in materials costs, as a proxyfor fluctuations in factor utilization.

Keywords
industrial performance; labor productivity; manufacturing

Journal
Economica: Volume 66, Issue 264