firms. Nevertheless, given that the data they use is cross-sectional, firm exit and the associated job destruction is not accounted for, and limited information is provided on jobs created by new entrants.

Rijkers et al (2014) confirm the notion that SMEs account for a larger share of net job growth in Tunisia. In fact, every year from 1996-2010, on average, firms with fewer than 10 employees account for about 55% of total net employment growth and those with fewer than 100 employees account for 73%. Strikingly, for almost all firm size groups, all net jobs are created by firms that are one year-old or younger, indicating again the importance of firm age. They also confirm that, as s in Haltiwanger et al (2013), firm size and _net job creation rates_ are negatively correlated without controlling for firm age. However, when firm age is controlled for, the association becomes positive indicating that net job growth rates are higher among larger firms. This is again an indication that firm age is perhaps more important than size to explain net job growth. Firm exit is negatively associated with size, but the association becomes mute once firm age is accounted for.<sup>22</sup> They report that firms with fewer than 100 employees account for about 49% (based on the average measure of size) to 56% (based on the base size) of _gross job creation_ . With a higher cutoff size of 250 employees, the contribution becomes 56% and 67%, respectively. Contribution to _job destruction_ by these firm categories is generally lower than their contributions to gross job creation. As a result, _net job growth rates_ by firms with 250 or fewer employees is substantial. In fact, based on the base size definition, firms with fewer than 10 employees alone account for almost all the _net job growth_ , although the figure drops to 60% when using the average measure of firm size.

Bedi and Shiferaw (2013) provide some additional evidence pointing to the importance of larger firms to job creation in Ethiopia. Although entry, often by smaller firms, accounts for over 50% of job creation, these jobs tend to be transitory as small firms have a higher likelihood of exit and a limited likelihood of graduating to a larger size category. As a result, over the 10 year period studied, there was a significant re-allocation of jobs from smaller to larger firms. In fact, small firms, between 10 and 50 employees, accounted for just about 28% of the gross job creation, on average. Similarly, Arrow et al (2014) show that larger firms exhibit higher _net job growth rates_ in South Africa. Although the _gross job creation rate_ (at 10%) is roughly similar across various firm size categories, _job destruction rates_ decline monotonically as firm size increases, resulting in higher _net job growth rates_ among larger firms.<sup>23</sup> In terms of job dynamics and firm age, younger firms appear to play a dominant role than the older ones, both for developing and developed economies. Haltiwanger et al (2013) report the negative association between firm age and _net job creation rate_ for the U.S is mainly driven by higher net job creation rates by start-up

> 22 World Bank (2015) provides similar results for Lebanon and Tunisia.

> 23 The authors note that the dataset is likely to underestimate firm birth, potentially underestimating _gross job creation rates_ among smaller firms since, as is widely documented, entrants tend to be smaller firms. Nevertheless, the authors conjecture that this fact doesn’t substantively change the fact that larger firms have higher net job creation rates.

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