When and How to Create a Job: The Survival of New Jobs in Austrian Firms

31 Pages Posted: 25 May 2005

See all articles by René Böheim

René Böheim

Johannes Kepler University Linz

Alfred Stiglbauer

Austrian National Bank

Rudolf Winter-Ebmer

Johannes Kepler University Linz - Department of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Date Written: May 2005

Abstract

While the volatility of job creations has been studied extensively, the survival chances of new jobs are less researched. The question when and how to expand a firm is of importance, both from the firms and from a macro perspective. Adjustment cost theories and arguments about option values of investment in firm expansion make predictions about the timing, sequencing and form of firm expansions. When we analyze 21 years of job creation in Austria, we find that the survival of new jobs (and of new firms) depends upon the state of the business cycle at the time of job creation, on the number of jobs created, and on firm age. Jobs in new firms last longer than new jobs in continuing firms.

Keywords: job creation, business cycle, reallocation, persistence

JEL Classification: J23, J63, E24, E32

Suggested Citation

Boheim, Rene and Stiglbauer, Alfred and Winter-Ebmer, Rudolf, When and How to Create a Job: The Survival of New Jobs in Austrian Firms (May 2005). Available at SSRN: https://ssrn.com/abstract=728965 or http://dx.doi.org/10.2139/ssrn.728965

Rene Boheim (Contact Author)

Johannes Kepler University Linz ( email )

Linz
Austria

Alfred Stiglbauer

Austrian National Bank ( email )

Otto-Wagner Platz 1
A-1011 Vienna
Austria

Rudolf Winter-Ebmer

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
+43 732 2468 8236 (Phone)
+43 732 2468 8238 (Fax)

HOME PAGE: http://www.econ.jku.at/winter

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

HOME PAGE: http://www.ihs.ac.at

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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