Who Creates Jobs? Econometric Modeling and Evidence for Austrian Firm Level Data

27 Pages Posted: 4 Oct 2015

See all articles by Peter Huber

Peter Huber

Austrian Institute of Economic Research (WIFO); Mendel University

Harald Oberhofer

Vienna University of Economics and Business - Department of Economics; Austrian Institute of Economic Research (WIFO)

Michael Pfaffermayr

University of Innsbruck - Department of Economics; Austrian Institute of Economic Research

Date Written: September 28, 2015

Abstract

This paper offers an empirical analysis of net job creation patterns at the firm level for the Austrian economy between 1993 and 2013 focusing on the impact of firm size and age. We propose a new estimation strategy based on a two-part model. This allows to identify the structural parameters of interest and to decompose behavioral differences between exiting and surviving firms. Our findings suggest that conditional on survival, young Austrian firms experience the largest net job creation rates. Differences in firm size are not able to explain variation in net job creation rates among the group of continuing enterprises. Job destruction induced by market exit, however, is largest among the young and small firms with this effect being even more pronounced during the times of the Great Recession. In order to formulate sensible policy recommendations, a separate treatment of continuing versus exiting firms as proposed by the new two-part model estimation approach seems crucial.

Keywords: Net job creation, firm size, firm age, one-part versus two-part models, Austrian economy, Great Recession

JEL Classification: C18, C53, D22, E24, L25, L26, M13

Suggested Citation

Huber, Peter and Oberhofer, Harald and Pfaffermayr, Michael, Who Creates Jobs? Econometric Modeling and Evidence for Austrian Firm Level Data (September 28, 2015). Available at SSRN: https://ssrn.com/abstract=2668619 or http://dx.doi.org/10.2139/ssrn.2668619

Peter Huber

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Mendel University ( email )

Zemedelska 1
Brno, South Moravia 61200
Czech Republic

Harald Oberhofer (Contact Author)

Vienna University of Economics and Business - Department of Economics ( email )

Welthandelsplatz 1
A-1020 Vienna
Austria

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Michael Pfaffermayr

University of Innsbruck - Department of Economics ( email )

Universitaetsstrasse 15
A-6020, Innsbruck
Austria
+43 512 507 7359 (Phone)

HOME PAGE: http://homepage.uibk.ac.at/~c43236/

Austrian Institute of Economic Research ( email )

P.O. Box 91
Wien, A-1103
Austria
+43 1 798 26 01-253 (Phone)
+43 1 798 93 86 (Fax)

HOME PAGE: http://www.wifo.ac.at/Michael.Pfaffermayr/

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