Do Small Businesses Create More Jobs? New Evidence for the United States from the National Establishment Time Series

By David Neumark, Brandon Wall, Junfu Zhang. Review of Economics and Statistics, 2011

539 citations recorded by the source corpus.

Abstract We use the National Establishment Time Series (NETS) to revisit the debate about the role of small businesses in job creation (Birch, 1987; Davis, Haltiwanger, & Schuh, 1996a). Using the NETS data, we examine evidence for the overall economy, as well as for different sectors. The results indicate that small firms and small establishments create more jobs, on net, although the difference is much smaller than Birch's methods suggest. Moreover, in the recent period we study, a negative relationship between establishment size and net job creation holds for both the manufacturing and services sectors.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/f7a8607f3e3d6c5acbe474f1941c30ff06b96186

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Citations in the corpus

Do small businesses create more jobs? New evidence for Europe (2013, unknown): “Recently, Neumark et al. (2011) investigated whether small businesses create more jobs for the USA.”
Diverging Trends in National and Local Concentration (2018, unknown): “[26] Neumark, David, Brandon Wall, and Junfu Zhang.”
Financial Constraints and Small and Medium Enterprises: A Review* (2020, background): “They serve as an engine of job creation (Birch, 1987; Neumark et al., 2011; Ayyagari et al., 2011) and are seedbeds of developing entrepreneurial talent and innovation (Acs and Audretsch, 1987; Acs et al.”
The Dynamics of Employment Growth: New Evidence from 18 Countries (2014, background): “Lotti et al (2003) and Neumark et al. (2008) find that there is a negative relationship between firm size and growth, violating the “Gibrat’s Law” which states that firm size and growth should be independent.”
E-commerce adoption by SMEs in developing countries: evidence from Indonesia (2017, background): “They contribute not only in terms of their numbers but also to job creation and poverty reduction (Wit and Kok 2014; Ayyagari et al. 2011; Neumark et al. 2011; Kotelnikov 2007).”
Self-employment and entrepreneurship in urban and rural labour markets ☆ (2014, background): “…research has shown that the density of all businesses – including small ones – is an important force determining agglomeration economies (Ellison et al., 2010; Glaeser, 2009; Glaeser and Kerr, 2010), and that small businesses disproportionately contribute to net job creation (Neumark et al., 2011).”