The Declining Average Size of Establishments: Evidence and Explanations
The average size of establishments rose through the expansion of the 1990s, and then fell slightly during the expansion of the 2000s. In this paper, we seek to understand the change in trend in the average size of establishments during the last two decades. We begin with an exploration of the robustness of the basic empirical facts. Both Business Employment Dynamics statistics from the Bureau of Labor Statistics and Business Dynamics Statistics from the Census Bureau show that the average size of businesses – both establishments and firms – is growing slower in the 2000s than in the 1990s. The Census Bureau data also show the trends of average size in the 1990s are similar to the trends from the late 1970s and the 1980s. Our empirical analysis results in two main conclusions. First, the change in trend of the average size of establishments occurs in almost all industries, and our decomposition shows that the sizeable shifts in industry composition that occurred in the U.S. economy during the past two decades account for only about half of the downward trend during the 2000s expansion. Second, we find that the decrease in the average size of establishments during the 2000s expansion can be explained by the age of establishments. Specifically, we find that establishment births are starting smaller and staying smaller.
|Date of creation:||Feb 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 606-5900
Fax: (202) 606-7890
Web page: http://www.bls.gov
More information through EDIRC
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.:
- Serguey Braguinsky & Lee G. Branstetter & Andre Regateiro, 2011. "The Incredible Shrinking Portuguese Firm," NBER Working Papers 17265, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:bls:wpaper:ec120010. 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: (Gregory Kurtzon)
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.