Estimation of Business Demography Statistics: A Method for Analyzing Job Creation and Destruction

Abstract

Business demography statistics, which provide data on the numbers of births, deaths and survivals of enterprises and/or establishments in a specific period, serve as important information for policymakers who intend to make decisions on the policy to promote entrepreneurship, which is considered as an essential instrument for improving competitiveness and generating economic growth and job opportunities. These important statistics can be compiled from statistical business registers in many countries. In Japan, the statistical business register is being re-engineered not only by redesigning the system but also by improving the quality of data sources; however, it will take some years before business demography statistics can be compiled directly from the Japanese statistical business register. In this paper, an alternative method of estimating business demography statistics that can be obtained directly from the data of Economic Censuses is proposed. The model used here is basically based on previous works, however, an enhanced version of the model is proposed here so that quantitative attributes of establishments/enterprises such as the number of persons engaged can be analyzed. Based on the enhanced model, a numerical example on job creation and destruction is given using the micro data of Economic Censuses, which reveals the importance of fostering entrepreneurship as well as opening establishments as policy measures for economic growth and job opportunities.

M. Takahashi—The views and opinions expressed in this paper are those of the authors and do not necessarily reflect the policies of the organization to which the authors belong or belonged. This work was supported by JSPS KAKENHI Grant Number JP16H02013.