Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/130635 
Year of Publication: 
2016
Series/Report no.: 
Staff Report No. 762
Publisher: 
Federal Reserve Bank of New York, New York, NY
Abstract: 
The U.S. economy has been going through a striking structural transformation - the secular reallocation of employment across sectors - over the past several decades. We propose a decomposition framework to assess the contributions of various margins of firm dynamics to this shift. Using firm-level data, we find that at least 50 percent of the adjustment has been taking place along the entry margin, owing to sectors receiving shares of start-up employment that differ from their overall employment shares. The rest is mostly the result of life cycle differences across sectors. Declining overall entry has a small but growing effect of dampening structural transformation.
Subjects: 
structural transformation
employment dynamics
sectoral reallocation
JEL: 
E24
J00
J23
L25
Document Type: 
Working Paper

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