Does small firm dynamics matter for occupation diversity and job quality? : Evidence from Brazil

Recent studies have explored the role of frm dynamics and the connection to job real location. However, limited attention has been devoted to the role of micro and small frms in this process, particularly about the quality of the jobs generated. Therefore, this article aims to measure the impact of micro and small frm dynamics on occupation diversifcation in Brazil, with specifc emphasis on job quality. The study used data from 558 microregions within the Brazilian industrial sector between 2003 and 2015. Panel data were applied to three econometric models: Feasible Generalized Least Squares (FGLS), Driscoll-Kraay (DK) and Instrumental Variable (IV) models for robustness analysis, including Two-Stage Least Squares (2SLS), Limited Information Maximum Likelihood (LIML), and the Generalized Method of Moments with Continuously Updating Estimators (GMM-CUE). Our main fnding reveals that the dynamics of micro and small frms positively impact occupation diversity in Brazil, leading to the creation of a wider range of job types. Furthermore, the frequency of change of frms from microenterprises to small businesses increases the occupation diversity in the Brazilian industrial sector. Our fndings are signifcant in providing policy recommendations for developing countries to achieve a more diverse labor market.