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On the Size Distribution of Employment and Establishments

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  • Jonathan S. Leonard

Abstract

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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  • Jonathan S. Leonard, 1986. "On the Size Distribution of Employment and Establishments," NBER Working Papers 1951, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:1951
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    1. 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 263-274, January.
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    1. repec:zbw:bofrdp:1988_026 is not listed on IDEAS
    2. Meng-Wen Tsou & Jin-Tan Liu & James Hammitt, 2002. "Worker turnover and job reallocation in Taiwanese manufacturing," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 401-411.
    3. Konings, Jozef & Lehmann, Hartmut & Schaffer, Mark E., 1996. "Job creation and job destruction in a transition economy: Ownership, firm size, and gross job flows in Polish manufacturing 1988-1991," Labour Economics, Elsevier, vol. 3(3), pages 299-317, October.
    4. repec:bla:scandj:v:102:y:2000:i:1:p:123-34 is not listed on IDEAS
    5. Contini, Bruno & Revelli, Riccardo, 1997. "Gross flows vs. net flows in the labor market: What is there to be learned?," Labour Economics, Elsevier, vol. 4(3), pages 245-263, September.
    6. Peisa, Paavo, 1988. "Firm growth : Adjustment and fluctuations," Research Discussion Papers 26/1988, Bank of Finland.
    7. Thorsten Beck & Asli Demirguc-Kunt & Ross Levine, 2005. "SMEs, Growth, and Poverty: Cross-Country Evidence," Journal of Economic Growth, Springer, vol. 10(3), pages 199-229, September.
    8. Peisa, Paavo, 1988. "Firm growth: Adjustment and fluctuations," Bank of Finland Research Discussion Papers 26/1988, Bank of Finland.

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