14.662 S15 Labor Economics II Lecture 23

Productivity the efficiency with which firms transform inputs into outputs is an essential concept in nearly every sub-field of economics. My goal in this lecture is to highlight some recent applied microeconomics research in this area. Most of this literature has focused on private firms, but you should think of “firms” broadly – including e.g. schools and hospitals. A broad “fact” that has motivated a great deal of productivity-related research is that there exist large and persistent differences in measured productivity levels across firms. Syverson (2011) provides an excellent recent overview; this is a fact at the heart of organizational economics, so if you are interested I would encourage you to think about sitting in on some of Bob’s classes.