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Explaining National Differences in the Size and Industrial Distribution of Employment

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  • Davis, Steven J.

    ()
    (The University of Chicago Graduate, School of Business)

  • Henrekson, Magnus

    ()
    (The Research Institute of Industrial Economics)

Abstract

What factors determine national differences in the size and industry distribution of employment? This study stresses the role of business taxation, employment security laws, credit market policies, wage-setting institutions and the size of the public sector. We characterize these aspects of the economic policy environment in Sweden prior to 1990-91 and compare them to the situation in other European countries and the United States. Our characterization and international comparisons show that Swedish policies strongly disfavored less capital-intensive firms, smaller firms, entry by new firms, and individual and family ownership of business. We also compile evidence that these policies affect outcomes. Taking the U.S. industrial distribution as a benchmark that reflects a comparatively neutral set of policies and institutions, Sweden's employment distribution in the mid-1980s is sharply tilted away from low-wage industries and industries with greater employment shares for smaller firms and establishments. The Swedish rate of self-employment in the 1970s and 1980s is the lowest among all OECD countries. Compared to other European countries, Sweden has an unusually high share of employment in large firms.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 482.

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Length: 41 pages
Date of creation: 01 Jun 1997
Date of revision:
Publication status: Published in Small Business Economics, 1999, pages 25.
Handle: RePEc:hhs:iuiwop:0482

Note: Forthcoming in Small Business Economics
Contact details of provider:
Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Email:
Web page: http://www.ifn.se/
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Keywords: Business Taxation; Industrial Policy; Industry Structure; Size Distribution;

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References

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  1. Barron, John M & Black, Dan A & Loewenstein, Mark A, 1987. "Employer Size: The Implications for Search, Training, Capital Investment, Starting Wages, and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 76-89, January.
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Cited by:
  1. Henrekson, Magnus & Johansson, Dan, 1999. " Institutional Effects on the Evolution of the Size Distribution of Firms," Small Business Economics, Springer, vol. 12(1), pages 11-23, February.

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