Consequences of downsizing in U.S. manufacturing, 1967 to 1997

There has been much discussion of “downsizing” in the press. In this chapter, using Census of Manufacturing data, I explore whether such a pattern has characterized U.S. manufacturing over the period from 1967 to 1997, the period when downsizing received the most attention. I do find evidence of a decline in average establishment size over this period.1 Moreover, regression to the mean also occurred, with large establishments tending to become smaller (or to being replaced by smaller enterprises) and small establishments tending to expand, with the overall tendency being movement toward the middle.