A cross-country analysis of start-up employment dynamics

This article carries out a detailed descriptive analysis of employment dynamics of new firms, using comparable and highly representative data for 19 countries. It does so by using a novel analytical decomposition of the contribution of new firms to job creation, which allows to separately focus on different margins. In particular, the contribution of new firms to job creation can be expressed as a combination of four different elements: start-up ratio; survival share; average size of firms at entry; and average post-entry growth rate of survivors. This comprehensive characterization of entrants’ employment dynamics points to regularities and differences in business dynamism across countries, and can be used as an important diagnostic tool by policy makers.