Measuring the Small Business Economy

To better track the overall growth and relative contributions of small business in the U.S. economy, the U.S. Bureau of Economic Analysis is developing new economic statistics by business size. The paper begins with a description of existing economic statistics for small businesses, including those from the U.S. Small Business Administration, U.S. Department of the Treasury, and Statistics Canada. We then present experimental estimates of 2012–2016 employment, wages, and wages per employee by enterprise size and industry, based on publicly available source data. We find wage and employment growth over the period was slowest for very small enterprises (those with less than 20 employees) and fastest for large enterprises (those with 500 or more employees), although this relationship differs across industries. Additionally, enterprises with 0–99 employees saw wages increase at a slower rate than medium and large enterprises (those employing 100 or more employees), lagging by 1.5 percent. A discussion of the measurement challenges related to developing a full suite of economic statistics for small businesses concludes the paper.