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On the Size Distribution of Employment and Establishments

  • Jonathan S. Leonard

Recent arguments that employment growth occurs disproportionately at small establishments are fundamentally misleading because they confuse regression to the mean with structural shifts in the size distribution of establishments and with an aging effect within cohorts. The net growth usually observed in aggregate studies hides the gross flows; 13 percent of the jobs in existence in 1974 had disappeared by 1980, while 18 percent of the 1980 jobs had not existed six years previously. The variation observed here in labor demand over time within individual establishments may help to explain unemployment.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1951.

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Date of creation: Jun 1986
Date of revision:
Handle: RePEc:nbr:nberwo:1951
Note: LS
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  1. Caves, Richard E & Khalilzadeh-Shirazi, J & Porter, M E, 1975. "Scale Economies in Statistical Analyses of Market Power," The Review of Economics and Statistics, MIT Press, vol. 57(2), pages 133-40, May.
  2. Leonard, Jonathan S, 1984. "The Impact of Affirmative Action on Employment," Journal of Labor Economics, University of Chicago Press, vol. 2(4), pages 439-63, October.
  3. Abraham, Katharine G, 1986. "Structural/Frictional vs. Deficient Demand Unemployment: Reply," American Economic Review, American Economic Association, vol. 76(1), pages 273-76, March.
  4. Robert E. Hall, 1980. "The Importance of Lifetime Jobs in the U.S. Economy," NBER Working Papers 0560, National Bureau of Economic Research, Inc.
  5. Meller, Patricio & Marfan, Manuel, 1981. "Small and Large Industry: Employment Generation, Linkages, and Key Sectors," Economic Development and Cultural Change, University of Chicago Press, vol. 29(2), pages 263-74, January.
  6. Akerlof, George A & Main, Brian G M, 1981. "An Experience-Weighted Measure of Employment and Unemployment Durations," American Economic Review, American Economic Association, vol. 71(5), pages 1003-11, December.
  7. Lilien, David M, 1980. "The Cyclical Pattern of Temporary Layoffs in United States Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 62(1), pages 24-31, February.
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