A Special News Report on People And Their Jobs in Offices, Fields and Factories
THE JOB-CREATING PROWESS of small business is a myth, a new study says.</br></br>Economists and politicians often assert that small businesses account for most new jobs, so entrepreneurs should get more access to credit, tax incentives and other perks from the federal government. But while smaller firms do exhibit sharply higher gross job-creation rates, they also show a higher rate of job loss, reducing the net job gain, new research shows.</br></br>In terms of net job creation, one Federal Reserve and two university economists found that manufacturing firms with at least 500 employees accounted for more than half of the jobs created between 1972 and 1988. Survival rates for manufacturing jobs increase sharply with employer size. The study was financed by the National Bureau of Economic Research.</br></br>Larger manufacturers pay better, too, mainly because they tend to hire more highly skilled and educated workers, says University of Chicago economist Steven Davis, who helped author the study.</br></br>PRODUCTIVITY GAINS seem best at high-tech companies.