June 21, 2013 --
by Erik A Knoder
Oregon Employment Department
Our standard analysis of employment by firm size shows that although there are a large number of small firms, most employment is in large firms. But, as with much in statistics, the result of any analysis depends on the assumptions made at the beginning. Changing the definition of firm-size classes can show that most employment is in smaller firms. Which is correct? Do small or large businesses provide most jobs?
The Oregon Employment Department traditionally assigns firms to one of eight size classes based on their employment: 1-4, 5-9, 10-19, 20-49, 50-99, 100-249, 250-500, and 500+ employees. These size classes are the same as the ones used by the federal government. It is clear that these size classes are unequal in size range. The first class has a range of four, the second has a range of five, the third class has a range of 10, and so on. The final class ranges from 500 to more than 10,000 employees. Given this, it is hardly surprising that the larger class sizes often contain more employment. The larger the size range, the more firms will be included within that range. Graph 1 shows the distribution of Oregon’s employment using these traditional size classes.
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