The U.S. Establishment-Size Distribution: Secular Changes and Sectoral Decomposition

This article studies the U.S. establishment-size distribution from 1974–2006. The main findings are: (i) the size of the “representative” establishment is relatively constant; (ii) the size distribution has become slightly more evenly distributed; (iii) the relative stability of aggregate statistics obscures important movements in the manufacturing and service sectors; (iv) both intra- and intersector changes contribute to aggregate changes; and (v) changes in the size distribution of firms are similar to those of establishments. These findings will be useful to calibrate and test models with firms/establishments heterogeneity.