Job Creation, Job Destruction and the Role of Small Firms: Firm‐Level Evidence for the UK *

Evidence on job creation and destruction for the United Kingdom is limited, dated, and refers almost entirely to the manufacturing sector. We use firm‐level data from 1997 to 2008 for almost all sectors, including services, and show that firms in the service sector exhibit much higher rates of job creation, but almost exactly the same rates of job destruction as those in manufacturing. ‘Small’ firms account for a disproportionately large fraction of job creation and destruction relative to their share of employment. Jobs created by small firms are no less likely to persist than those created by large firms.