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March 2007, Vol. 130, No. 3
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.
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1 Steven J. Davis, John C. Haltiwanger, and Scott Schuh, Job Creation and Job Destruction, (Cambridge, MIT Press, 1966), Chapter 4.
Related BLS programs
Business Employment Dynamics
employment dynamics: tabulations by employer size.—Feb.
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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