Private ADP Job Data May Better Capture Startup Job Growth than Government Data

“ADP” in the quote below, stands for Automatic Data Processing Inc. which is a large payroll processing firm that provides job growth data that are an alternative to the official Bureau of Labor Statistics numbers. Recent research by Haltiwanger and others, has indicated that startups may have an under-appreciated large role in job growth.

(p. C1) It has been dubbed “Another Dumb Payroll” report and a “random number generator.” But the ADP employment report doesn’t entirely deserve its bad rap.

. . .
ADP may better capture . . . new business formation than Labor Department estimates. BofA Merrill Lynch economist Michelle Meyer notes that new firms show up in ADP data after two months of existence; the government doesn’t have complete records until much later. Indeed, more than half the 187,000 new jobs ADP reported last month came from businesses with fewer than 50 employees.

For the full story, see:
KELLY EVANS. “AHEAD OF THE TAPE; Respect for ADP: Jobs Picture Is Brighter.” The Wall Street Journal (Tues., FEBRUARY 4, 2011): C1.
(Note: ellipses added.)
(Note: the online version of the story has the title “AHEAD OF THE TAPE; Respect for ADP: Jobs Picture Is Brighter Than Thought.”)

For some of the work showing the importance of startups in job creation, see:
Haltiwanger, John C., Ron S. Jarmin, and Javier Jarmin. “Who Creates Jobs? Small Vs. Large Vs. Young.” NBER Working Paper # 16300, August 2010.

Leave a Reply

Your email address will not be published.