Small steps for workers, a giant leap for productivity

Igal Hendel, Yossi Spiegel

Research output: Contribution to journalArticlepeer-review


We document the evolution of productivity in a steel mini mill with fixed capital, producing an unchanged product with Leontief technology working 24/7. Despite-almost-unchanged production conditions, output doubled within the sample period (12 years). We decompose the gains into downtime reductions, more rounds of production pertime, and more output per run. After attributing productivity gains to investment and an incentive plan, we are left with a large unexplained component. Learning by experimentation, or tweaking, seems to be behind the continual and gradual process of productivity growth. The findings suggest that capacity is not well defined, even in batch-oriented manufacturing.

Original languageEnglish
Pages (from-to)73-90
Number of pages18
JournalAmerican Economic Journal: Applied Economics
Issue number1 A
StatePublished - 2014


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