TY  - JOUR
AU  - Neumark,David
AU  - Wall,Brandon
AU  - Zhang,Junfu
TI  - Do Small Businesses Create More Jobs? New Evidence from the National Establishment Time Series
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13818
PY  - 2008
Y2  - February 2008
UR  - http://www.nber.org/papers/w13818
L1  - http://www.nber.org/papers/w13818.pdf
N1  - Author contact info:
David Neumark
Department of Economics
University of California at Irvine
3151 Social Science Plaza
Irvine, CA  92697
Tel: 949-824-8496
Fax: 949/824-2182
E-Mail: dneumark@uci.edu

Brandon B. Wall
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305-6072
E-Mail: brandon.wall@gmail.com

Junfu Zhang
Department of Economics
Clark University
Worcester, MA  01610
Tel: 508-793-7247
E-Mail: juzhang@clarku.edu
AB  - We use a new database, the National Establishment Time Series (NETS), to revisit the debate about the role of small businesses in job creation.  Birch (e.g., 1987) argued that small firms are the most important source of job creation in the U.S. economy, but Davis et al. (1996a) argued that this conclusion was flawed, and based on improved methods and using data for the manufacturing sector they concluded that there was no relationship between establishment size and net job creation.  Using the NETS data, we examine evidence for the overall economy, as well as for different sectors.  The results indicate that small establishments and small firms create more jobs, on net, although the difference is much smaller than what is suggested by Birch's methods.  However, the negative relationship between establishment size and job creation is much less clear for the manufacturing sector, which may explain some of the earlier findings contradicting Birch's conclusions.
ER  -