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Size Class Dynamics: Small and Large Firms in the 2008 Recession

Jessica Gayle Helfand

Abstract

The Bureau of Labor Statistics firm size class data provide an important platform to discuss the impact of small and large firms on job creation. In the 2007 publication “Employment dynamics: small and large firms over the business cycle,“ Helfand, Sadeghi, and Talan explored the behavior of the size classes in the recessions of the early 1990s and 2001 and the subsequent recoveries and found that small and large firms played markedly different roles in each of the downturns and expansion. This paper expands the data series, following the recovery from the 2001 recession into the current 2008 recession. It then compares the performance of small and large firms in the recessions of 1991, 2001, and 2008, answering the question of which size classes have been responsible for job creation and destruction over the previous two decades' business cycle.