SMEs, Age, and Jobs

The subject of which firms are the key employers—and which of these create or destroy jobs at a faster rate—is eminently important for academics and policy makers. The relative importance of small versus large firms and old versus young firms has in particular been extensively debated and studied. Nevertheless, the results often hinge on the questions that are asked. Moreover, the categorical definitions used to define firm size and age, and the nature and coverage of the data used have important effects. This paper lays out the relevant definitions and metrics that are central to the debate, reviewing the main findings to date on the subject (with particular emphasis on results in developing economies). The paper adds updated results for 117 developing economies using the World Bank’s Enterprise Survey Data, finding that (i) small and medium enterprises and older establishments are the dominant employers in the nonagricultural private sector labor force in developing economies, and (ii) net job creation is negatively correlated with establishment age and, although the effect of size is also negative, its significance is sensitive to the definition and methods used.

Bibliographic Details

Main Authors:	Aga, Gemechu, Francis, David C., Rodriguez Meza, Jorge
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2015-11
Subjects:	JOBS, EMPLOYMENT, JOB CREATION RATE, MOTIVATION, ECONOMIC GROWTH, ACCOUNTING, NET JOB CREATION, PRODUCTION, EMPLOYMENT SHARE, FIRM SURVEY, INCOME, SERVICE SECTOR, FIRM DYNAMICS, MEDIUM ENTERPRISES, TOTAL LABOR FORCE, INFORMATION, CROSS- SECTIONAL DATA, LABOR FORCE, SURVIVAL RATE, JOB GENERATION, MANUFACTURERS, JOB, AGE CATEGORIES, EFFECTS, EMPLOYMENT POTENTIAL, LABOR STATISTICS, MERGERS, FIRM SIZE, TRAINING PROGRAMS, EMPLOYMENT SIZE, DRIVERS, SMALL BUSINESS, EMPLOYMENT LEVEL, FIRM EXIT, TRAINING, EMPLOYMENT LEVELS, DEVELOPMENT ECONOMICS, MANUFACTURING ESTABLISHMENTS, FIRM LEVEL, WORKER, PREVIOUS STUDIES, FARM EMPLOYMENT, LABOR PRODUCTIVITY, NON-FARM EMPLOYMENT, PRODUCTIVITY, JOB LOSS, JOB CHURNING, MARKETS, FIRM, ORGANIZATIONS, BUSINESS CYCLE, DOMINANT EMPLOYERS, LABOR, ENTERPRISES, TOTAL EMPLOYMENT, EMPLOYMENT CREATION, PREVIOUS RESULTS, EFFICIENCY, SIZE OF FIRMS, SMALL ENTERPRISE, SHOP, FIRM ENTRY, AVERAGE EMPLOYMENT SIZE, SMALL FIRM, FIRMS, WORKERS, JOB DESTRUCTION RATES, POLICIES, OWNERSHIP STRUCTURE, SMALL ENTERPRISES, TURNOVER, VALUE, PLANT SIZE, NET EMPLOYMENT, STATE-OWNED ENTERPRISES, JOB CREATION RATES, AGE GROUPS, CO-OPERATIVES, PRIVATE FIRMS, ENTERPRISE, PRODUCTIVE FIRMS, EMPLOYMENT GROWTH, JOB CREATION, PRIVATE SECTOR, DOWNWARD BIAS, MARKET, JOB FLOWS, ECONOMIC THEORY, EMPLOYERS, ECONOMICS, EXPANSION, JOB DESTRUCTION, THEORY, FIRM” LEVEL, SECURITY, RISK, JOB DESTRUCTION RATE, CONTRACTING, BUSINESS ENVIRONMENT, EMPLOYEE, INNOVATION, EMPLOYMENT DYNAMICS, LENDING, LABOUR REGULATION, SMALL FIRMS, SUPPLIERS, FIRM GROWTH, ENTREPRENEURSHIP, LABOUR, EMPLOYMENT GROWTH RATE, SMALL BUSINESSES, SME, EMPLOYEES,
Online Access:	http://documents.worldbank.org/curated/en/2015/11/25462713/smes-age-jobs-review-literature-metrics-evidence https://hdl.handle.net/10986/23455
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