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Trends in the distribution of employment by employer size: Recent
Canadian evidence
by Ted Wannell
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 039
A common wisdom developed during the economic expansion of the 1980s
that small firms were responsible for most of the net new job creation.
The primary goal of this paper is to test that hypothesis using several
different data sources: the Census of Manufacturing, the Survey of Employment,
Payroll and Hours, and a newly developed longitudinal database on firms.
The major findings are:
- that the percentage of jobs found in small firms did, indeed, increase
in the 1980s;
- that the shift of employment share to small firms occurred throughout
the private sector economy, but was more evident in goods producing
industries than service sector industries;
- the increasing importance of service sector employment played a
role in the growth of small firm jobs, but was generally less important
than shifts in the size distribution within the major industrial sectors;
and,
- from 1983 to 1988 the increasing percentage of small firm jobs
had a small negative impact on average earnings.
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