Ores and scores: two cases of how competition led to productivity "miracles."

Although iron ore mining and public schools may seem to have nothing in common, you may be surprised. Recent research suggests that the labor productivity of ore producers and teachers may respond similarly to competitive pressure. To date, most macroeconomic research on the determinants of labor productivity has generally focused on variables such as capital stock per worker, technology, the quality of the workforce, and laws and regulations that govern production. However, this conventional view may leave something out: the degree of competitive pressure faced by a production unit. In "Ores and Scores: Two Cases of How Competition Led to Productivity 'Miracles'," Satyajit Chatterjee examines two cases in which increased competition in the product market caused dramatic improvements in labor productivity: iron mines in the Midwest and public schools in Milwaukee.