Timely Statistics on SMEs and Entrepreneurs in the U'S' Labor Market

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Timely Statisticson SMEs and Entrepreneursin
the U.S. Labor Market

• James R. Spletzer
• U.S. Bureau of Labor Statistics
• October 2009

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Todays Presentation

• ? Employment losses in the current recession are
  much greater than in recent recessions
• We would like timely data on employment gains and
  losses by firm size, and we would like timely
  data on entrepreneurs
• We can get both from the Business Employment
  Dynamics (BED) data produced by the Bureau of
  Labor Statistics (BLS)

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Net Employment Losses During Recessions, by Firm
Size
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Gross Job Gains and Gross Job Losses,Firms Sized
1-19 and 500
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Gross Job Gains and Gross Job Losses,Firms Sized
1-19
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Gross Job Gains and Gross Job Losses,Firms Sized
1-19
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Summary Firms Sized 1-19

• Large employment losses in the current recession
  (through 2008Q4) by small firms sized 1-19
• -- Losses appear to be characterized by declining
  job creation, not increasing job destruction
• Declining job creation is most evident in
  expanding firms and not in opening firms
• There is a steep fall in the number of expanding
  firms in the current recession
• Preliminary benchmark announcement (10/2/09)
  states that job losses in 2009Q1 due to an
  increase in the number of business closings

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Entrepreneurs in the BED

• There are many empirical definitions of
  entrepreneurs
• Nascent entrepreneurs (Paul Reynolds, PSED)
• Newly self-employed (Kauffman index of
  entrepreneurship, using the CPS)
• New firms (using business data)
• We define entrepreneurs in the BED as new
  establishments with positive employment
• Were working on a measure of entrepreneurial
  births that are unaffiliated with existing
  firms research indicates lower levels but same
  trends

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Entrepreneurs in the BED
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Summary Entrepreneurs in the BED

• The number of entrepreneurs in the BED
• - Increased steadily 1993-2000 and 2003-2005
• Declined during 2008
• There has been a long-term decline (1998-2008) in
  the jobs created by entrepreneurs in the BED
• - Each entrepreneur created 6.3 jobs (on average)
  in the 1993-1998 period
• Fell to 4.4 (on average) in the 2005-2007 period
• Why?
• Is this important?

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Timely Statistics on SMEs and Entrepreneurs in
the U.S. Labor Market

• The BED from BLS provides the most timely data in
  the U.S. (8 month lag) on job gains and job
  losses by firm size, as well as data on business
  births
• The BED through 2008Q4 shows large job losses by
  small firms (1-19) in the current recession
• -- Sharp decline in the number of small firms
  expanding
• The BED also shows substantial long-term declines
  in the number of jobs created by entrepreneurs

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Description of the BED

• ? The BLS Quarterly Census of Employment and
  Wages (QCEW) program
• -- Collects employment and wages
• -- By ownership, county, and industry
• -- Administrative data from the State UI
  systems,
• enhanced with quarterly survey data
• -- A virtual census (98) of employees on
  nonfarm payrolls
• ? First quarter 2009 (released Oct 16, 2009)
• -- Employment of 129.0 million
• -- 9.1 million establishments

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Description of the BED

• Business Employment Dynamics (BED)
• ? QCEW microdata linked longitudinally
• ? Why link the microdata longitudinally?
• Net changes in employment are one of the most
  important economic statistics
• Underlying these net changes is substantial
  churning businesses are continually opening,
  closing, expanding, and contracting
• These large gross job flows have fascinating
  business cycle properties

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Description of the BED

• Quarterly Press Release
• -- http//www.bls.gov/news.release/pdf/cewbd.pdf
• -- Gross job gains (expansions, openings,
  births) and gross job losses (contractions,
  closings, deaths) by industry, state, size
  class
• -- 2009Q1 data to be released November 19, 2009
• -- 2008Q4 data released August 19, 2009
• From September 2008 to December 2008 the
  number of job gains from opening and expanding
  private sector establishments was 6.7 million,
  and the number of job losses from closing and
  contracting establishments was 8.5 million

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Description of the BED
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Supplemental TableNet Employment Growth by Firm
Size
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Supplemental TableNet Employment Growth by Firm
Size
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Supplemental TableEmployment by Firm Size
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Supplemental TableEmployment by Firm Size
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Supplemental TableNet Employment Growth by Firm
Size
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Supplemental TableEmployment by Firm Size
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