Who Creates Jobs? Small vs. Large vs. Young

The view that small businesses create the most jobs remains appealing to policymakers and small business advocates. Using data from the Census Bureau Business Dynamics Statistics and Longitudinal Business Database, we explore the many issues at the core of this ongoing debate. We find that the relationship between firm size and employment growth is sensitive to these issues. However, our main finding is that once we control for firm age there is no systematic relationship between firm size and growth. Our findings highlight the important role of business startups and young businesses in U.S. job creation.

Mom-and-Pop Meet Big-Box: Complements or Substitutes?

In part due to the popular perception that Big-Boxes displace smaller, often family owned (a.k.a. Mom-and-Pop) retail establishments, several empirical studies have examined the evidence on how Big-Boxes’ impact local retail employment but no clear consensus has emerged. To help shed light on this debate, we exploit establishment-level data with detailed location information from a single metropolitan area to quantify the impact of Big-Box store entry and growth on nearby single unit and local chain stores. We incorporate a rich set of controls for local retail market conditions as well as whether or not the Big-Boxes are in the same sector as the smaller stores. We find a substantial negative impact of Big-Box entry and growth on the employment growth at both single unit and especially smaller chain stores – but only when the Big-Box activity is both in the immediate area and in the same detailed industry.

Measuring the Dynamics of Young and Small Businesses: Integrating the Employer and Nonemployer Universes

We develop a preliminary version of an Integrated Longitudinal Business Database (ILBD) that combines administrative records and survey data for all employer and nonemployer business units in the United States. Unlike other large-scale business databases, the ILBD tracks business transitions from nonemployer to employer status. This feature of the ILBD opens a new frontier for the study of business formation, early lifecycle dynamics and the precursors to job creation in the U.S. economy. There are 5.4 million nonfarm business firms with employees as of 2000 and another 15.5 million with no employees. Our analysis focuses on 40 industries that account for nearly half of nonemployers and 36 percent of nonemployer revenues. Within these industries, nonemployers account for 14 percent of business revenues. About 220,000 of the seven million nonemployers in our selected industries hire workers and migrate to the employer universe over a three-year horizon. These Migrants account for 20 percent of revenue among young employers (three years or less since first hire). Compared to other nonemployers, the revenue of Migrants grows very rapidly in the year prior to and the year of transition to employer status.

Private Equity and Employment

Private equity critics claim that leveraged buyouts bring huge job losses. To investigate this claim, we construct and analyze a new dataset that covers U.S. private equity transactions from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing outcomes to controls similar in terms of industry, size, age, and prior growth. Relative to controls, employment at target establishments declines 3 percent over two years post buyout and 6 percent over five years. The job losses are concentrated among public-to-private buyouts, and transactions involving firms in the service and retail sectors. But target firms also create more new jobs at new establishments, and they acquire and divest establishments more rapidly. When we consider these additional adjustment margins, net relative job losses at target firms are less than 1 percent of initial employment. In contrast, the sum of gross job creation and destruction at target firms exceeds that of controls by 13 percent of employment over two years. In short, private equity buyouts catalyze the creative destruction process in the labor market, with only a modest net impact on employment. The creative destruction response mainly involves a more rapid reallocation of jobs across establishments within target firms.

Emergence of a Novel Avian Pox Disease in British Tit Species

Avian pox is a viral disease with a wide host range. In Great Britain, avian pox in birds of the Paridae family was first diagnosed in a great tit (Parus major) from south-east England in 2006. An increasing number of avian pox incidents in Paridae have been reported each year since, indicative of an emergent infection. Here, we utilise a database of opportunistic reports of garden bird mortality and morbidity to analyse spatial and temporal patterns of suspected avian pox throughout Great Britain, 2006–2010. Reports of affected Paridae (211 incidents) outnumbered reports in non-Paridae (91 incidents). The majority (90%) of Paridae incidents involved great tits. Paridae pox incidents were more likely to involve multiple individuals (77.3%) than were incidents in non-Paridae hosts (31.9%). Unlike the small wart-like lesions usually seen in non-Paridae with avian pox in Great Britain, lesions in Paridae were frequently large, often with an ulcerated surface and caseous core. Spatial analyses revealed strong clustering of suspected avian pox incidents involving Paridae hosts, but only weak, inconsistent clustering of incidents involving non-Paridae hosts. There was no spatial association between Paridae and non-Paridae incidents. We documented significant spatial spread of Paridae pox from an origin in south-east England; no spatial spread was evident for non-Paridae pox. For both host clades, there was an annual peak of reports in August/September. Sequencing of the avian poxvirus 4b core protein produced an identical viral sequence from each of 20 great tits tested from Great Britain. This sequence was identical to that from great tits from central Europe and Scandinavia. In contrast, sequence variation was evident amongst virus tested from 17 non-Paridae hosts of 5 species. Our findings show Paridae pox to be an emerging infectious disease in wild birds in Great Britain, apparently originating from viral incursion from central Europe or Scandinavia

An Analysis of the Employment Effects of the Washington High Technology Business and Occupation (B&O) Tax Credit: Technical Report

This paper estimates the effects of an R&D tax credit in the state of Washington on job creation. The research uses micro-data on the job creation and tax credits received by individual firms in the state of Washington from 2004 to 2009. We correct for the endogeneity of R&D tax credits received by individual firms by using instrumental variables based in part on national industry factor shares for R&D. We estimate that this tax credit created jobs, but at a high cost. The cost per job-year created is estimated to be between $40,000 and$50,000. The credit was so high cost in part because the credit was non-refundable. As a result, about one-quarter of the firms receiving credits were maxed out on credit eligibility, so that the credit provided no marginal incentive for additional R&D spending or job creation

The Longitudinal Business Database

As the largest federal statistical agency and primary collector of data on businesses, households and individuals, the Census Bureau each year conducts numerous surveys intended to provide statistics on a wide range of topics about the population and economy of the United States. The Census Bureau’s decennial population and quinquennial economic censuses are unique, providing information on all U.S. households and business establishments, respectively.CES,economic,research,micro,data,microdata,chief,economist

The Impact of Hurricanes Katrina, Rita and Wilma on Business Establishments

We show that GIS based estimates of the economic impact of the 2005 hurricanes provide a more accurate characterization of affected businesses than widely reported estimates constructed from county level data. Our methodology relies on mapping business establishments into damage zones defined by remote sensing information provided by FEMA. Our methodology is based on pre-storm data, so estimates can be made available very quickly to inform the public as well as policy makers. Our GIS-based estimates indicate significantly smaller impacts on business payroll than previous estimates using county level data. Tests using post-storm data support our GIS methodology.