Declining Average Size of Establishments: Evidence and Explanations

摘要

Keen observers of labor market statistics have noticed that the average size of establishments has been decreasing during the last decade. The graph immediately below presents the average size of establishments in the total private U.S. economy for the 1994-2011 time period (the publicly available data from the Bureau of Labor Statistics used to create this graph are described in the following section). The average size of establishments rose through the expansion of the 1990s, and then fell slightly during the expansion of the 2000s. These trends suggest that the U.S. economy has changed in some fundamental way during the past two decades. In this paper, we seek to understand the change in trend in the average size of establishments during the last two decades.