Measuring Small Business Dynamics and Employment with Private-Sector Real-Time Data

48 Pages Posted: 5 Aug 2021 Last revised: 23 Dec 2023

See all articles by Andre Kurmann

Andre Kurmann

Drexel University

Etienne Lalé

York University - Faculty of Liberal Arts & Professional Studies; CIRANO; IZA

Lien Ta

Drexel University - Bennett S. LeBow College of Business

Date Written: December 19, 2023

Abstract

Recent years have witnessed an explosion of research using private-sector data to measure business dynamics and employment in real- or almost real-time. Yet important questions remain about sample representativeness and how to identify business openings and closings. This paper proposes a new methodology to address these issues by exploiting direct information on business activity from alternative data sources. We apply the methodology to small business data from Homebase matched with information on business activity from Google, Facebook, and Safegraph, and show that the resulting estimates for small business activity and employment during the COVID-19 pandemic closely fit administrative data that have recently become available. We then use the data to study whether small businesses have been hit harder by the pandemic and the extent to which the Paycheck Protection Program helped mitigate these effects.

Keywords: Small business activity; Sample turnover versus business openings/closings; Matching records; Paycheck Protection Program;

JEL Classification: E01, E24, E32, E60

Suggested Citation

Kurmann, Andre and Lalé, Etienne and Ta, Lien, Measuring Small Business Dynamics and Employment with Private-Sector Real-Time Data (December 19, 2023). Available at SSRN: https://ssrn.com/abstract=3896299 or http://dx.doi.org/10.2139/ssrn.3896299

Andre Kurmann

Drexel University ( email )

School of Economics
3141 Chestnut St
Philadelphia, PA 19104
United States

Etienne Lalé (Contact Author)

York University - Faculty of Liberal Arts & Professional Studies ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada
(436) 736 5083 (Phone)

CIRANO ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Lien Ta

Drexel University - Bennett S. LeBow College of Business ( email )

101 N. 33rd St.
Philadelphia, PA 19104
United States

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