Job Creation And Variations In Corporate Growth

Over most of the size range of companies, the variance of corporate employment growth increases with increases in the size of company. Thus policies aimed at promoting employment growth in smaller companies are less risky than policies aimed at larger companies. Moreover the greater propensity of small firms to create jobs holds within each size class of company and within each SIC Division. The birth and death rates of companies fall with increases in company size but the high death rates of small companies are outweighed by their high birth rates to produce a net increase in jobs in small companies. The opposite is true for large and medium-sized companies and big absolute falls in employment here have outweighed the modest increase in employment in small companies to produce a substantial overall fall in corporate employment.

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