Working Paper No. 1189

Who Creates Jobs and Who Creates Productivity? Small versus Large versus Young versus Old

Published: November 20, 2017Pages: 29Keywords: Job dynamics; Productivity; Matched employer-employee data; Industrial structure and structural changeJEL-codes: J23; E24; L16; L25; L26

Who Creates Jobs and Who Creates Productivity? Small versus Large versus Young versus Old Fredrik Heyman, Pehr-Johan Norbäck and Lars Persson


This paper examines employment and productivity dynamics in the Swedish business sector during the period 1996–2013. In order to analyze employment and productivity in a consistent way we apply a novel implementation of a method, which previously has been used extensively to analyze job dynamics, on both job and productivity dynamics.

Our results, based on detailed matched employer-employee data for Sweden, indicate substantial heterogeneity in terms of job and productivity dynamics for different types of firms. We find that most of the net jobs were created in young, small firms, but at the same time we also find that most of the productivity gains were created in large old incumbent firms, thus suggesting a division of labor between the two.

Our analysis provides new insights into the importance of age and size of firms in the restructuring process, stressing the dichotomy between employment growth and productivity growth in different types of firms.

Fredrik Heyman

Contact

Ph: +46 8 665 4537
fredrik.heyman@ifn.se

Pehr-Johan Norbäck

Contact

Ph: +46 8 665 4522
Mob: +46 73 547 3379
pehr-johan.norback@if...

Lars Persson

Contact

Ph: +46 8 665 4504
lars.persson@ifn.se

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

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The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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