TY  - JOUR
AU  - Haltiwanger,John C.
AU  - Jarmin,Ron S.
AU  - Miranda,Javier
TI  - Who Creates Jobs? Small vs. Large vs. Young
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16300
PY  - 2010
Y2  - August 2010
UR  - http://www.nber.org/papers/w16300
L1  - http://www.nber.org/papers/w16300.pdf
N1  - Author contact info:
John C. Haltiwanger
Department of Economics
University of Maryland
College Park, MD 20742
Tel: 301/405-3504
Fax: 301/405-3542
E-Mail: haltiwan@econ.umd.edu

Ron S. Jarmin
Center for Economic Studies
U.S. Census Bureau
4600 Silver Hill Road
Washington, DC 20233
Tel: 301.763.1858
Fax: 301.763.5935
E-Mail: ron.s.jarmin@census.gov

Javier Miranda
U.S. Bureau of the Census
Center for Economic Studies
4600 Silver Hill Road
Washington, DC 20233
Tel: 301-763-6466
E-Mail: javier.miranda@census.gov
AB  - There’s been a long, sometimes heated, debate on the role of firm size in employment growth. Despite skepticism in the academic community, the notion that growth is negatively related to firm size remains appealing to policymakers and small business advocates. The widespread and repeated claim from this community is that most new jobs are created by small businesses. Using data from the Census Bureau Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues regarding the role of firm size and growth that have been at the core of this ongoing debate (such as the role of regression to the mean). We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age there is no systematic relationship between firm size and growth. Our findings highlight the important role of business startups and young businesses in U.S. job creation. Business startups contribute substantially to both gross and net job creation. In addition, we find an “up or out” dynamic of young firms. These findings imply that it is critical to control for and understand the role of firm age in explaining U.S. job creation.
ER  -