Working Paper: NBER ID: w19396
Authors: Andrew B. Bernard; Teresa C. Fort
Abstract: This paper documents the extent and characteristics of plants and firms in the US that are outside the manufacturing sector according to official government statistics but nonetheless are heavily involved in activities related to the production of manufactured goods. Using new data on establishment activities in the Census of Wholesale Trade conducted by the US Bureau of the Census in 2002 and 2007, this paper provides evidence on so-called "factoryless goods producers" (FGPs) in the US economy. FGPs are formally in the wholesale sector but, unlike traditional wholesale establishments, FGPs design the goods they sell and coordinate the production activities. This paper documents the extent of FGPs in the wholesale sector and how they differ from traditional wholesalers in terms of their employment, wages, productivity and output. Reclassifying FGP establishments to the manufacturing sector using our definition would have shifted at least 595,000 workers to as many as 1,311,000 workers from wholesale to manufacturing sectors in 2002 and at least 431,000 workers to as many as 1,934,000 workers in 2007.
Keywords: factoryless goods producers; employment; manufacturing; wholesale trade
JEL Codes: D22; F61; L23; L24; L81
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Reclassifying factoryless goods producers (FGPs) (L68) | Increase in manufacturing employment (L69) |
| Reclassifying factoryless goods producers (FGPs) (L68) | Shift of at least 595,000 to as many as 1,311,000 workers from wholesale to manufacturing in 2002 (L60) |
| Reclassifying factoryless goods producers (FGPs) (L68) | Shift of at least 431,000 to as many as 1,934,000 workers from wholesale to manufacturing in 2007 (L69) |