Do Small Businesses Create More Jobs? New Evidence for the United States from the National Establishment Time Series
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Open Access
- 1 February 2011
- journal article
- Published by MIT Press in The Review of Economics and Statistics
- Vol. 93 (1), 16-29
- https://doi.org/10.1162/rest_a_00060
Abstract
We use the National Establishment Time Series (NETS) to revisit the debate about the role of small businesses in job creation (Birch, 1987; Davis, Haltiwanger, & Schuh, 1996a). Using the NETS data, we examine evidence for the overall economy, as well as for different sectors. The results indicate that small firms and small establishments create more jobs, on net, although the difference is much smaller than Birch's methods suggest. Moreover, in the recent period we study, a negative relationship between establishment size and net job creation holds for both the manufacturing and services sectors. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.Keywords
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