Business Dynamics Statistics Briefing: Historically Large Decline in Job Creation from Startup and Existing Firms in the 2008-2009 Recession

8 Pages Posted: 25 Mar 2011

See all articles by John Haltiwanger

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 Administrative Records Research and Applications

Date Written: March 2011

Abstract

The Census Bureau’s Business Dynamics Statistics (BDS) provides data on business dynamics for U.S. firms and establishments with paid employees. This briefing highlights some key features of the most recent BDS update, which now has data through 2009 - the trough of the recent recession.

The BDS shows a very large decline in gross job creation from existing firms as well as startups in the recession. Economy-wide job-creation rates and the job-creation rate from business startups (new firms) are lower in 2009 than in any year since at least 1980. The historically low rates in 2009 reflect many factors, the first of which is the very large decline in overall economic activity.

However, the recession exhibited not only a very large decline in overall activity, but also an especially large reduction in overall job creation, and in job creation from startups and new establishments. The historically low job creation rates from business startups combined with a secular downward trend in job creation and destruction rates over the past few decades contribute to 2009’s lower job creation rates.

The Business Dynamics Statistics (BDS) is a product of the U.S. Census Bureau that measures business openings and closings, startups, job creation, and job destruction by firm size, age, industrial sector, and state. The U.S. economy is comprised of more than six million establishments with paid employees. The population of these businesses is constantly churning - some businesses grow, others decline, and yet others close. New businesses constantly replenish this pool. The BDS monitors this activity to provide a picture of the dynamics underlying aggregate net employment growth.

Keywords: census bureau, bds, business dynamics statistics, recession, job creation, startup

Suggested Citation

Haltiwanger, John C. and Jarmin, Ron S. and Miranda, Javier, Business Dynamics Statistics Briefing: Historically Large Decline in Job Creation from Startup and Existing Firms in the 2008-2009 Recession (March 2011). Available at SSRN: https://ssrn.com/abstract=1793167 or http://dx.doi.org/10.2139/ssrn.1793167

John C. Haltiwanger (Contact Author)

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

U.S. Census Bureau - Center for Administrative Records Research and Applications ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

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