Learning by Doing

This paper reviews the theoretical and empirical literature on learning by doing. Many of the distinctive theoretical implications of learning by doing have been derived under the assumption that the cost-quantity relationships observed in numerous empirical studies are largely the result of passive learning, and some further require that passive learning is unbounded. The empirical literature raises doubts about both assumptions. When observed cost-quantity relationships indicate sustained productivity growth, factors other than passive learning are generally at work. When passive learning is the dominant factor, productivity growth is invariably bounded. Thus, empirically-relevant theories incorporating learning by doing are hybrid models in which passive learning coexists with other sources of growth. But in such models, many of the distinctive implications of passive learning become unimportant. Moreover, passive learning is often an inessential component of long-run growth; to the contrary, too much learning can lead to stagnation.Learning by doing, learning curves, passive learning, progress curves, cost-quantity relationship, knowledge spillovers, forgetting, endogenous growth, technological change.

How Much Did the Liberty Shipbuilders Learn? New Evidence for an Old Case Study

This paper uses previously unavailable historical records to show that several assumptions central to a learning by doing explanation of productivity growth in the construction of Liberty ships during World War II are mistaken. Impressive increases in output per worker recorded at one of the largest shipyards in the program, Calship, are shown to be strongly associated with increases in capital intensity and with a reduction in quality, where the latter is measured by the probability of a ship developing serious fractures that threatened the lives of its crew. Capital deepening and quality change, in conjunction with changes in production technologies and capacity utilization, account for virtually all the increase in labor productivity.Economic Growth Learning by doing, Liberty ships

How Much Did The Liberty Shipbuilders Forget?

This paper produces new estimates of the rate of organizational forgetting in the well-known case study of US wartime ship production. I show that estimation is easily colored by problems of unobserved product heterogeneity and sensitivity to specification of the learning curve. Using data recently constructed from primary sources at the National Archives, I produce new estimates of organizational forgetting at the rate of no more than 4 percent, and possibly less than zero percent, per month. These are much smaller rates than previously reported. However, the paper also stresses the fact that our ability to obtain reliable estimates of rates of organizational forgetting is extremely limited.learning by doing, organizational forgetting, technological change

The Iron and Steel Shipbuilding Data Set, 1825-1914: Sources, Coverage, and Coding Decisions

This article is a supporting document to my paper “Selection and Firm Survival. Evidence from the Shipbuilding Industry, 1825-1914”, Review of Economics and Statistics, 87(1):26-36, February 2005. The article provides a basic description of data sources, coverage and limitations, along with coding decisions made for the purposes of statistical analysis. The data are available at http://www.fiu.edu/~thompsop/data/shipbuilding/shipbuilding.html.

Selection and Firm Survival: Evidence from the Shipbuilding Industry, 1825-1914

Several theories of firm performance can explain the well-known observation that survival is positively related to age. However, a more mundane explanation – selection bias driven by variations in firm quality – may also underlie the phenomenon. This paper employs a 90-year plant-level panel data set on the US iron and steel shipbuilding industry of the 19th and early 20th centuries to discriminate between the two explanations. The shipbuilding industry exhibits the usual joint dependency of survival on age and size, but this dependency is eliminated after controlling for heterogeneity by using pre-entry experience as a proxy for firm quality. The evidence points to a dominant role for selection bias in creating the age-dependency of survival. At the same time, pre-entry experience is found to have a large and extremely persistent effect on survival, and this finding is inconsistent with standard explanations for the role of pre-entry experience on firm performance.shipbuilding, firm survival, age, selection, unobserved heterogeneity

Patent Citations and the Geography of Knowledge Spillovers: Evidence from Inventor- and Examiner-Added Citations

I report new evidence for localized knowledge spillovers identified by within-patent variations in the geographic matching rates of citations added by inventors and citations added by examiners. Evaluated at the mean citation lag, inventor citations are 20 percent more likely than examiner citations to match the country of origin of their citing patent, while US inventor citations are 25 percent more likely to match the state or metropolitan area of their citing patent. The localization of intranational knowledge spillovers declines with the passage of time, but international borders present a persistent barrier to spillovers.Voting, patent citations, knowledge spillovers, geography

Desperate Housewives? Communication Difficulties and the Dynamics of Marital (un)Happiness

This paper develops a model of marital dissolution based on communication difficulties. The quality of a marriage depends on the proximity of an action to a target. The target is unknown, and must be learned over time. Each individual receives private signals about the target, and can communicate them only imperfectly to his or her spouse. Because of imperfect communication, spouses may hold different beliefs about the optimal action. The action actually chosen is a compromise of the spouses’ distinct beliefs. If a couple’s beliefs diverge too widely, one or both of them may prefer to dissolve the marriage. The paper explores how poor communication contributes to marital unhappiness, as well as its implications for the dynamics of divorce risk, the welfare properties of divorce decisions, and the role of counseling. When the distribution of decision-making power in the household favors men, wives (but not husbands) can find themselves trapped for prolonged periods in a marriage that leaves them as unhappy as it is possible to be without seeking relief through divorce.marriage, divorce, communication difficulties, learning