Sizing Up Job Creation - In Brief

Who creates jobs?

Small businesses have long received government support on the assumption that they are the primary engine of job creation. However, the question of whether they actually generate more net job growth than large businesses is far from settled.
Methodological issues, including different ways of allocating job gains and losses based on firm size, have frustrated economists in their attempts to either confirm or debunk the conventional wisdom.
Some recent analysis suggests that young businesses generate a disproportionate fraction of new net jobs. Future research may shed more light on which types of businesses best stimulate job growth.