Fed Publication Looks at What Policymakers Can and Cannot Do to Create Jobs
With unemployment above 9 percent for more than two years, policymakers are grappling with how to create jobs. But many proposals, such as more fiscal stimulus, temporary tax breaks, and subsidies for private hiring, may not have the punch that their supporters hope. The cover story in the latest issue of Region Focus magazine looks at these and other job-creation concepts.
In the United States, new businesses account for almost 20 percent of gross job creation, according to a 2010 paper by John Haltiwanger of the University of Maryland and Ron Jarmin and Javier Miranda of the U.S. Census Bureau. While startups are also more likely to go out of business in a given year, those that survive grow much more quickly than their older counterparts. “The startups are a critical component of the experimentation process that contributes to restructuring and growth in the United States on an ongoing basis,” the authors concluded.
SOURCE: US Federal Reserve Bank Richmond