Measuring Small Business Dynamics and Employment with Private-Sector Real-Time Data
48 Pages Posted: 5 Aug 2021 Last revised: 23 Dec 2023
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: Suggested Citation