Who creates jobs? Econometric modeling and evidence for Austrian firm level data
European Economic Review, 2016, 91, pp.57-71
This paper provides evidence on the role of firm size and firm age for firm level net job creation in the Austrian economy
between 1993 and 2013 and during the Great Recession. We propose a new estimation strategy based on a two-part model to decompose
behavioural differences between exiting and surviving firms. Young firms contribute most to net job creation, despite high
relative exit rates, due to high growth rates among young surviving firms. Small firms have similar job creation rates conditional
on survival as large firms. Small firms' contribution to job creation is, however, smaller due to higher exit rates. The up-or-out
dynamics characterising less regulated economies such as the USA also apply to the more regulated Austrian economy. During
the Great Recession both the relative net job creation rate conditional on survival and the relative survival probability
of young firms decreased. The relative contribution of small firms to net job creation, by contrast, increased due to increased
relative job creation rates of small firms conditional on survival.
Keywords: TP_Wettbewerbsfaehigkeit_Unternehmen
Research group:Regional Economics and Spatial Analysis – Industrial, Innovation and International Economics