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Employment dynamics: small and large firms over the business cycle
Jessica Helfand, Akbar Sadeghi, and David Talan
Who creates the most jobs: small businesses or large businesses? This subject has been widely discussed among economists and researchers and is often a topic of political debates citing the important role of small businesses in creating jobs. The small-firm versus large-firm issue is twofold: do small firms create most of the new jobs, or is the share of small firms’ net job gains greater than their base share of employment? Economists argue that the answer depends on which methodology is used.1 New statistics from the Business Employment Dynamics (BED) program of the U.S. Bureau of Labor Statistics (BLS) provide data with which to analyze many of the size class methodological issues, and are a valuable data resource with which to answer these questions.
This excerpt is from an article published in the March 2007 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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Footnotes
1
Steven J. Davis, John C. Haltiwanger, and Scott Schuh, Job
Creation and Job Destruction, (Cambridge, MIT Press, 1966), Chapter 4.
Business
employment dynamics: tabulations by employer size.—Feb.
2006.
Employment
dynamics of individual companies versus multicorporations.—Dec.
2005.
Survival and
longevity in the Business Employment Dynamics data.—May
2005.
Business
employment dynamics: new data on gross job gains and losses—Apr.
2004.
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