Abstract for: Fragmentation and Turnover Hold Back Labor Productivity in the Single-family Residential Construction Industry

Construction labor productivity has declined over recent decades, despite gains in other sectors. Within residential construction, there has been a divergence in labor productivity between the single-family and multiple-family industries. Labor productivity has remained flat overall in the single-family industry while it increased in the multiple-family industry similar to the broader economy. This study uses these two related industries as a natural comparison for investigating differences in labor productivity trends. I develop a simulation model for labor productivity in residential construction and calibrate it to historical data for both the multiple-family and single-family industries. The model includes construction pipeline, supply and demand regulated by price, labor force, and learning. I compare calibration results to investigate the divergence in labor productivity between the two industries. I also run scenarios that confirm those differences and test outcomes. The simulation model replicates historical data for both industries. Compared to the multiple-family industry, the single-family industry relies more on worker knowledge and has a higher level of employee turnover. Labor productivity in the single-family industry would increase with the lower fragmentation (more standardized projects) and the more stable workforce seen in the multiple-family industry. This study lays a foundation for modeling and investigating labor productivity in residential construction industries and beyond. The simulation model incorporates the labor force and its knowledge, replicates historical dynamics, and offers insights into labor productivity trends. Strategies for improving labor productivity in building homes could be especially useful for regions experiencing housing shortages. Coding syntax for plots, understanding equations before using, organizing data