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http://ssrn.com/abstract=1666157
 
 

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Who Creates Jobs? Small vs. Large vs. Young


John Haltiwanger


University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Ron S. Jarmin


U.S. Census Bureau

Javier Miranda


U.S. Census Bureau - Center for Economic Studies

August 1, 2010

US Census Bureau Center for Economic Studies Paper No. CES-WP- 10-17

Abstract:     
There’s been a long, sometimes heated, debate on the role of firm size in employment growth. Despite skepticism in the academic community, the notion that growth is negatively related to firm size remains appealing to policymakers and small business advocates. The widespread and repeated claim from this community is that most new jobs are created by small businesses. Using data from the Census Bureau Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues regarding the role of firm size and growth that have been at the core of this ongoing debate (such as the role of regression to the mean). We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age there is no systematic relationship between firm size and growth. Our findings highlight the important role of business startups and young businesses in U.S. job creation. Business startups contribute substantially to both gross and net job creation. In addition, we find an “up or out” dynamic of young firms. These findings imply that it is critical to control for and understand the role of firm age in explaining U.S. job creation.

Number of Pages in PDF File: 49

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Date posted: August 28, 2010  

Suggested Citation

Haltiwanger, John and Jarmin, Ron S. and Miranda, Javier, Who Creates Jobs? Small vs. Large vs. Young (August 1, 2010). US Census Bureau Center for Economic Studies Paper No. CES-WP- 10-17. Available at SSRN: http://ssrn.com/abstract=1666157 or http://dx.doi.org/10.2139/ssrn.1666157

Contact Information

John C. Haltiwanger
University of Maryland - Department of Economics ( email )
College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Institute for the Study of Labor (IZA) ( email )
P.O. Box 7240
Bonn, D-53072
Germany
Ron S. Jarmin
U.S. Census Bureau ( email )
4700 Silver Hill Road
Washington, DC 20233
United States
Javier Miranda (Contact Author)
U.S. Census Bureau - Center for Economic Studies ( email )
4700 Silver Hill Road
Washington, DC 20233
United States
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