Job Flows and Job Quality by Establishment Size in the Finnish Manufacturing Sector 1980–94

This paper studies how employment patterns and growth vary with establishment size in the Finnish manufacturing sector during the period 1980–94. The findings are compared with the predictions of alternative theories of firm growth. The paper also examines some aspects of job quality in different size categories, including wages, labour productivity, working hours, labour turnover and the persistence of jobs. According to the findings, small establishments create and destroy jobs relatively more than large establishments. In addition, in the smallest size categories both the share of gross job creation and the share of gross job destruction is larger than the share of employment. However, there is no clear relationship between establishment size and net employment change. Furthermore, after studying different aspects of job quality, we can conclude that the jobs offered by small and large establishments differ greatly in many respects and it is difficult to evaluate the total welfare effect.