Given all the yelling about ‘jobs, jobs, jobs,’ the SBA Office of Advocacy released a particularly timely report last week, aptly entitled An Analysis of Small Business and Jobs. The paper, authored by Advocacy economist Brian Headd, bills itself as a primer to help policy makers (and anyone else who happens to be interested) “understand some basic facts and trends in small business employment … .” Always assuming that any of them or their staff will actually read it. And they should. It’s good stuff and should help to quiet some of those small business detractors who maintain that small firms don’t create as many net new jobs as they are credited with. This report looks at 15 years’ worth of both static and dynamic data from sources in both the Census Bureau (Statistics of U.S. Businesses) and the Bureau of Labor Statistics (Business Employment Dynamics).

By using both data sets, Headd is able to examine the impact of small employers on the labor market in both static and dynamic contexts, which yields a solid set of facts. The static data shows the small business share of employment: roughly half the private sector workforce. Meanwhile, the dynamic data illustrates the small business role in job creation — although that role changes, depending on the question you ask. For example, when performing an analysis of job creation by firm age, the data shows that a cohort of firms, tracked from birth, create more jobs at startup than they do at any other time during the following 20 years. On the other hand, a review of quarterly dynamic employment data finds that continuing firms account for more than two-thirds (69%) of net new job creation, while firm births and deaths only net the remaining 31%. And, during the period from 1992 through the middle of last year, gains or losses of 20 or more employees in a relatively small number of firms accounts for 57% of net employment change.