Advanced Search
MyIDEAS: Login to save this article or follow this journal

Job Creation and Firm Dynamics in the United States

Contents:

Author Info

  • John Haltiwanger

Abstract

Executive SummaryBusiness dynamism plays an important role in job creation and productivity growth in the United States. Business start-ups are an important contributor to that dynamism. Start-ups contribute disproportionately to job creation but are very heterogeneous in terms of productivity. The subsequent “up-or-out” dynamic of young businesses is an important source of job and productivity growth: exiting young businesses are of very low productivity, and the surviving young businesses exhibit rapid growth with above average productivity. The United States shows signs of becoming less dynamic over time—exhibiting a slower pace of reallocation with an accompanying slower pace of job creation from business start-ups. The recent recession saw the lowest overall rate of gross job creation and job creation from start-ups since at least 1980. Job creation for small (young) businesses took an especially large hit in the recession and has been very slow to recover. An open question is whether the observed decline in dynamism exhibited by U.S. businesses will have adverse consequences for U.S. innovation, job, and productivity growth in the future.The fundamental impulse that keeps the capital engine in motion comes from the new consumers’ goods, the new methods of production and transportation, the new markets…. [The process] incessantly revolutionizes from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact of capitalism.Joseph Schumpeter

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.jstor.org/stable/pdfplus/10.1086/663154
Download Restriction: Access to the online full text or PDF requires a subscription.

File URL: http://www.jstor.org/stable/full/10.1086/663154
Download Restriction: Access to the online full text or PDF requires a subscription.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Chicago Press in its journal Innovation Policy and the Economy.

Volume (Year): 12 (2012)
Issue (Month): 1 ()
Pages: 17 - 38

as in new window
Handle: RePEc:ucp:ipolec:doi:10.1086/663154

Contact details of provider:
Web page: http://www.journals.uchicago.edu/IPE/

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Chang-Tai Hsieh & Peter Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," Working Papers 09-04, Center for Economic Studies, U.S. Census Bureau.
  2. John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2010. "Who Creates Jobs? Small vs. Large vs. Young," Working Papers 10-17, Center for Economic Studies, U.S. Census Bureau.
  3. Lucia Foster & John Haltiwanger & Chad Syverson, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," NBER Working Papers 11555, National Bureau of Economic Research, Inc.
  4. Lucia Foster & John Haltiwanger & C.J. Krizan, 1998. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Working Papers 6803, National Bureau of Economic Research, Inc.
  5. Steven Davis & R Jason Faberman & John Haltiwanger & Ron Jarmin & Javier Miranda, 2008. "Business Volatility, Job Destruction, and Unemployment," Working Papers 08-26, Center for Economic Studies, U.S. Census Bureau.
  6. Steven J. Davis & John Haltiwanger & Ron Jarmin & Javier Miranda, 2007. "Volatility and Dispersion in Business Growth Rates: Publicly Traded versus Privately Held Firms," NBER Chapters, in: NBER Macroeconomics Annual 2006, Volume 21, pages 107-180 National Bureau of Economic Research, Inc.
  7. Chad Syverson, 2003. "Product Substitutability and Productivity Dispersion," NBER Working Papers 10049, National Bureau of Economic Research, Inc.
  8. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2013. "Cross-Country Differences in Productivity: The Role of Allocation and Selection," American Economic Review, American Economic Association, vol. 103(1), pages 305-34, February.
  9. Steven J. Davis & Jason Faberman & John C. Haltiwanger, 2011. "Labor Market Flows in the Cross Section and Over Time," NBER Working Papers 17294, National Bureau of Economic Research, Inc.
  10. Diego Restuccia & Richard Rogerson, 2007. "Policy Distortions and Aggregate Productivity with Heterogeneous Plants," NBER Working Papers 13018, National Bureau of Economic Research, Inc.
  11. Steven J. Davis & R. Jason Faberman & John C. Haltiwanger, 2010. "The Establishment-Level Behavior of Vacancies and Hiring," NBER Working Papers 16265, National Bureau of Economic Research, Inc.
  12. Hulten, Charles R. & Dean, Edwin R. & Harper, Michael (ed.), 2001. "New Developments in Productivity Analysis," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226360621.
  13. Lucia Foster & John Haltiwanger & C. J. Krizan, 2006. "Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 748-758, November.
Full references (including those not matched with items on IDEAS)

Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Growth and dynamism: troubling facts
    by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2014-06-23 13:19:50
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Anyadike-Danes, Michael & Bjuggren, Carl-Magnus & Gottschalk, Sandra & Hölzl, Werner & Johansson, Dan & Maliranta, Mika & Myrann, Anja, 2013. "Accounting for Job Growth: Disentangling Size and Age Effects in an International Cohort Comparison," HUI Working Papers 84, HUI Research.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ucp:ipolec:doi:10.1086/663154. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.