Large Employers Are More Cyclically Sensitive
We provide new evidence that large firms or establishments are more sensitive than small ones to business cycle conditions. Larger employers shed proportionally more jobs in recessions and create more of their new jobs late in expansions, both in gross and net terms. We employ a variety of measures of relative employment growth, employer size and classification by size, and a variety of U.S. datasets, both repeated cross-sections and job flows with employer longitudinal information, starting in the mid 1970's and now spanning four business cycles. We revisit two statistical fallacies, the Regression and Reclassification biases, and show empirically that they are quantitatively modest given our focus on relative cyclical behavior. The differential growth rate of employment between large (>1000 employees) and small (
|Date of creation:||Feb 2009|
|Date of revision:|
|Publication status:||published as The Contribution of Large and Small Employers to Job Creation in Times of High and Low Unemployment, with Fabien Postel-Vinay. American Economic Review, October 2012, 102(6), 2509-2539. See also NBER WP 14740|
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