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Accounting for Job Growth: Disentangling Size and Age Effects in an International Cohort Comparison

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Author Info

  • Anyadike-Danes, Michael

    (Aston University)

  • Bjuggren, Carl-Magnus

    (Linköping University)

  • Gottschalk, Sandra

    (Centre for European Economic Research (ZEW))

  • Hölzl, Werner

    (Austrian Institute of Economic Research (WIFO))

  • Johansson, Dan

    (HUI Research)

  • Maliranta, Mika

    (The Research Institute of the Finnish Economy (ETLA))

  • Myrann, Anja

    (Ragnar Frisch Centre for Economic Research)

Abstract

The contribution of different-sized businesses to job creation continues to attract policymakers’ attention, however, it has recently been recognized that conclusions about size were confounded with the effect of age. We probe the role of size, controlling for age, by comparing the cohorts of firms born in 1998 over their first decade of life, using variation across half a dozen northern European countries Austria, Finland, Germany, Norway, Sweden, and the UK to pin down the effects. We find that a very small proportion of the smallest firms play a crucial role in accounting for cross-country differences in job growth.

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Bibliographic Info

Paper provided by HUI Research in its series HUI Working Papers with number 84.

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Length: 41 pages
Date of creation: 13 Mar 2013
Date of revision:
Handle: RePEc:hhs:huiwps:0084

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Keywords: employment; business size; business age; cohorts; job creation;

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References

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  1. John Haltiwanger & Stefano Scarpetta & Helena Schweiger, 2010. "Cross country differences in job reallocation: the role of industry, firm size and regulations," Working Papers 116, European Bank for Reconstruction and Development, Office of the Chief Economist.
  2. Eric Bartelsman & John Haltiwanger & Stefano Scarpetta, 2009. "Measuring and Analyzing Cross-country Differences in Firm Dynamics," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 15-76 National Bureau of Economic Research, Inc.
  3. Hopenhayn, Hugo A, 1992. "Entry, Exit, and Firm Dynamics in Long Run Equilibrium," Econometrica, Econometric Society, vol. 60(5), pages 1127-50, September.
  4. Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
  5. Steven Vale, 2006. "The International comparability of Business Start-up Rates Final Report," OECD Statistics Working Papers 2006/4, OECD Publishing.
  6. Haltiwanger, John & Scarpetta, Stefano & Schweiger, Helena, 2006. "Assessing job flows across countries : the role of industry, firm size, and regulations," Policy Research Working Paper Series 4070, The World Bank.
  7. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2003. "Comparative Analysis of Firm Demographics and Survival: Micro-Level Evidence for the OECD Countries," OECD Economics Department Working Papers 348, OECD Publishing.
  8. John Haltiwanger, 2012. "Job Creation and Firm Dynamics in the United States," NBER Chapters, in: Innovation Policy and the Economy, Volume 12, pages 17-38 National Bureau of Economic Research, Inc.
  9. Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
  10. Lu�s M B Cabral & Jos� Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
  11. Bassanini, Andrea & Marianna, Pascal, 2009. "Looking Inside the Perpetual-Motion Machine: Job and Worker Flows in OECD Countries," IZA Discussion Papers 4452, Institute for the Study of Labor (IZA).
  12. Ericson, Richard & Pakes, Ariel, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 53-82, January.
  13. David Neumark & Brandon Wall & Junfu Zhang, 2011. "Do Small Businesses Create More Jobs? New Evidence for the United States from the National Establishment Time Series," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 16-29, August.
  14. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-70, May.
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