On the Size Distribution of Employment and Establishments

25 Pages Posted: 19 Jun 2004 Last revised: 2 Nov 2022

See all articles by Jonathan S. Leonard

Jonathan S. Leonard

University of California, Berkeley - Finance Group; National Bureau of Economic Research (NBER)

Date Written: June 1986

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.

Suggested Citation

Leonard, Jonathan S., On the Size Distribution of Employment and Establishments (June 1986). NBER Working Paper No. w1951, Available at SSRN: https://ssrn.com/abstract=344775

Jonathan S. Leonard (Contact Author)

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