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The Contribution of Establishment Births and Deaths To Employment Growth

James R. Spletzer


The purpose of this paper is to examine how establishment births and deaths contribute to job creation, job destruction, and net employment growth at different frequencies of measurement. The longitudinal data are constructed from quarterly unemployment insurance microdata from the state of West Virginia, and are essentially a census of establishments in all industries in that state. Defining establishment births and deaths turns out to be an exercise in how to use cross-sectional administrative data for longitudinal research purposes. The analysis of job flows indicates that the importance of establishment births and deaths on a quarterly time frame is relatively small but certainly non-trivial, whereas births and deaths account for roughly half of all jobs created and destroyed on a triennial time frame.