In this paper we will look at job creation and destruction in firms. We will answer the questionif it is the large companies that create jobs, while the smaller companies are contributingmuch less. Or is it the young companies that create jobs? And who destroys the most jobs?In the crisis Denmark lost 186,000 jobs in the private sector. The question is where and howcould these jobs be recreated. Are these issues specific to industries or are they universal?The data used is register data on workplaces and firms for the period 1980-2007. The baseunit of data is the workplace. The company (firm) is the legal entity. A company can havemany sites, and one of the ways companies can grow is by expanding with multiple sites.This can happen by mergers and acquisitions but can also happen by creating “daughterworkplaces”. It is therefore essential to look at workplaces and firms at the same time. Acomplication here is that firms switch ID over time because of change of ownership, mergersand divisions. Data must be corrected so that these administrative issues will not affect thesurvival of firms. The data are used in a way where we can cover firm birth and firm death,spin-offs and mergers. The analysis will make it possible to differentiate between net andgross creation of jobs because we can follow each single individual in and out of jobs. Wehave for Denmark found that size on its own does not have a big impact, but young firms aremuch more likely to contribute to a positive growth. For the U.S. it has been found that thegrowth in jobs comes from small businesses. A closer analysis though shows that the mainfactor here is the firm age. Thus, it is found that young firms net create the most jobs, butthey are also responsible for the most job destructions....
