Who Creates Jobs? Small vs. Large vs. Young

John C. Haltiwanger, Ron S. Jarmin, Javier Miranda

NBER Working Paper No. 16300
Issued in August 2010, Revised in November 2012
NBER Program(s):Economic Fluctuations and Growth, Labor Studies, Productivity, Innovation, and Entrepreneurship

The view that small businesses create the most jobs remains appealing to policymakers and small business advocates. Using data from the Census Bureau Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues at the core of this ongoing debate. 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.

A non-technical summary of this paper is available in the February 2011 NBER Digest.  You can sign up to receive the NBER Digest by email.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w16300

Published: “Who Creates Jobs? Small vs. Large vs. Young” (co-authored with Ron Jarmin and Javier Miranda), Review of Economics and Statistics, 2013, 347-361.