Are young businesses worth more to the economy than established companies?

Many experts have supported the belief that firms employing 500 people or fewer are the backbone of the American economy. However, three economists are now challenging this idea.

A study published last month by the National Bureau of Economic Research has called this notion "misplaced and wrong," MSNBC reports. Every president since Ronald Reagan, and even the Small Business Administration, has gone on record saying that two-thirds of new jobs are created by small businesses.

The data, though, tells a different story. Using 29 years of U.S. Census data, the authors found that a firm's age matters much more than its size. For example, startups make up only 3 percent of the workforce, but account for nearly 20 percent of gross job creation.

Yet, entrepreneurs should not be too quick in believing the study. Many experts have called the study "misleading" and its conclusions "a joke," according to MSNBC.

"Startups by definition can only create jobs - as they are not old enough to eliminate them yet. This artificially inflates the job creation power of a startup," Victor Cheng, author of The Recession-Proof Business, told the site.

The authors conclude that gearing government incentives and tax breaks to younger businesses, rather than more established ones, will create more "bang for the buck."