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3.2  Cohorts

Our longitudinal firm database contains firms that were in operation throughout the entire sample period as well as firms that were born and firms that died during the period. It is possible that firms belonging to different cohorts display different levels of labour productivity and that this variation has contributed to the heterogeneity observed in the previous section. Table 6 gives the means and standard deviations of labour productivity for, as well as the number of members in, each possible entry and exit cohort between 1994 and 2003.

Each row of the table provides information on all cohorts of firms that are first observed in a particular year. Columns of the table provide information on all cohorts of firms that are last observed in a particular year. Along diagonals, cohorts are observed for the same length of time. For example, the left most diagonal of the table shows information for all cohorts of firms that were observed for only one year between 1994 and 2003.

The average labour productivity of firms belonging to different cohorts varies considerably, ranging from 15 dollars per hour worked, for the cohort of firms that were first observed in 2001 and last observed in 2002, to 158 for the cohort of firms that were first observed in 1998 and last observed in 2001. Firms that we observe for the entire sample period also have relatively high average labour productivity of 42 dollars per hour worked. Their cohort is ranked 6th out of the 55 cohorts shown in Table 6. The standard deviation of firms’ labour productivity within cohorts also varies considerably, ranging from 121 dollars per hour worked for firms entering and exiting in 1998 to 1451 dollars per hour worked for firms entering and exiting in 1997.

It is very hard to identify any pattern in either the means or the standard deviations of labour productivity across cohorts of firms simply by looking at Table 6. Regressions on both cohort means and standard deviations using each cohorts entry year and its age, conditional on entry year, as explanatory variables as well as indicators for whether the cohorts were left and right censored (whether or not the cohorts were first or last observed in the first and last years of our sample period respectively) did not reveal any statistically significant patterns in the data.

Table 6   Average labour productivity for all cohorts
    Exit-year
Entry-year 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
1994 Mean 22 56 39 34 28 27 37 27 36 42
SD 122 667 241 277 210 394 342 341 211 233
N 6120 13178 11216 11334 10049 9515 9650 8563 8200 95583
1995 Mean   33 28 21 24 19 25 33 21 35
SD   407 231 164 235 352 128 230 484 253
N   1785 3663 3665 3115 2699 2464 2258 1988 14487
1996 Mean     20 18 21 39 25 28 25 44
SD     160 150 331 514 135 165 259 417
N     1541 3436 3191 2715 2608 2183 1851 13750
1997 Mean       39 20 22 29 26 32 34
SD       1451 191 211 241 191 602 250
N       1613 3073 2712 2363 2061 1718 12117
1998 Mean         21 33 24 158 27 34
SD         121 234 164 789 195 208
N         2250 3502 3283 2898 2360 15490
1999 Mean           23 29 26 25 40
SD           225 345 160 227 242
N           2101 3606 3472 2656 17620
2000 Mean             25 28 25 35
SD             265 302 269 240
N             1964 3479 3491 22181
2001 Mean               47 15 36
SD               376 332 343
N               1091 2989 22683
2002 Mean                 45 31
SD                 476 180
N                 1325 27261
2003 Mean                   27
SD                   807
N                   14533
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