Learn More: Jobs by Firm Age

Metadata

Variable Definitions:
New Firm Jobs: The number of jobs in an area for workers at firms 0 - 3 years old. 
Established Firm Jobs: The number of jobs in an area for workers at firms 4 - 10 years old. 
Well Established Firm Jobs: The number of jobs in an area for workers at firms 11+ years old. 


Source:
LEHD Origin-Destination Employment Statistics
Years Available:
2008 - 2017
Geographic Unit:
Census Tract

Why are these Variables Important to Measure?

The age of a firm is directly related to both job creation and job stability. In the past 30 years, the share of employment for startup firms has declined by almost 30 percent. Mature firms (5+ years old), on average, account for over 85% of the total employment. However, young firms generate a majority (90%) of new job growth.  A 30 year decline in firm entry, partly attributed to business cycle shocks and differential responses from new versus mature firms, has resulted in an increasing share of older firms. Generally, older firms are less responsive to shocks in business cycles. Understanding the share of jobs in both emerging and established firms provides information for local government and economic actors about areas of new job creation and where businesses are generally more stable. This is also useful in program development for supportive services for new businesses.

Sources
“Firm Age, Investment Opportunities, and Job Creation”. Journal of Finance. Link
"How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size" National Bureau of Economic Research. 2013. Link
“The Role of Firm Age in the Dynamics of Job Creation and Destruction” US Census Bureau. Link
“The Role of Entrepreneurship in US Job Creation and Economic Dynamism” Journal of Economic Perspectives. 2014. Link
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