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Gross, net, and new job creation by entrepreneurs

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  • Åstebro, Thomas
  • Tåg, Joacim

Abstract

Using a dataset with over 24 million year-employment observations and the universe of more than 230,000 entries into entrepreneurship in one economy we analyze the gross (including the founders), net (excluding the founders), and new (jobs to the former unemployed or those outside the labor force) job creation by entrepreneurs two and six years after start-up. These novel measures of job creation show that the average entrepreneur does not create any jobs for any other than him/her-self, and typically arrives from having another job. Thus, short term job creation by entrepreneurs involves a reshuffling of jobs from older to new firms rather than creating new jobs.

Suggested Citation

  • Åstebro, Thomas & Tåg, Joacim, 2017. "Gross, net, and new job creation by entrepreneurs," Journal of Business Venturing Insights, Elsevier, vol. 8(C), pages 64-70.
  • Handle: RePEc:eee:jobuve:v:8:y:2017:i:c:p:64-70
    DOI: 10.1016/j.jbvi.2017.06.001
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    References listed on IDEAS

    as
    1. Erik Hurst & Benjamin Wild Pugsley, 2011. "What Do Small Businesses Do?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 73-142.
    2. repec:bla:jemstr:v:26:y:2017:i:1:p:3-34 is not listed on IDEAS
    3. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521728355, March.
    4. Caliendo, Marco & Künn, Steffen, 2011. "Start-up subsidies for the unemployed: Long-term evidence and effect heterogeneity," Journal of Public Economics, Elsevier, vol. 95(3), pages 311-331.
    5. Tåg, Joacim & Åstebro, Thomas & Thompson, Peter, 2016. "Hierarchies and entrepreneurship," European Economic Review, Elsevier, vol. 89(C), pages 129-147.
    6. Robert W. Fairlie & Javier Miranda, 2017. "Taking the Leap: The Determinants of Entrepreneurs Hiring Their First Employee," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(1), pages 3-34, February.
    7. Ryan Decker & John Haltiwanger & Ron Jarmin & Javier Miranda, 2014. "The Role of Entrepreneurship in US Job Creation and Economic Dynamism," Journal of Economic Perspectives, American Economic Association, vol. 28(3), pages 3-24, Summer.
    8. Steven J. Davis & John Haltiwanger & Ronald S. Jarmin & C.J. Krizan & Javier Miranda & Alfred Nucci & Kristin Sandusky, 2009. "Measuring the Dynamics of Young and Small Businesses: Integrating the Employer and Nonemployer Universes," NBER Chapters,in: Producer Dynamics: New Evidence from Micro Data, pages 329-366 National Bureau of Economic Research, Inc.
    9. Parker,Simon C., 2009. "The Economics of Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521899604, March.
    10. John Haltiwanger & Ron S. Jarmin & Javier Miranda, 2013. "Who Creates Jobs? Small versus Large versus Young," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 347-361, May.
    11. Åstebro, Thomas & Tåg, Joacim, 2015. "Jobs Incorporated: Incorporation Status and Job Creation," Working Paper Series 1059, Research Institute of Industrial Economics.
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    More about this item

    Keywords

    Entrepreneurship; Job creation; Incorporation; Occupational choice; Self-employment; Sole proprietorship;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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