It is well recognized that small and medium-sized enterprises (SMEs) play a crucial role in economic growth and employment generation (Beck et al., 2005; Kongolo, 2010; Neumark et al., 2011; Haltiwanger et al., 2013; Decker et al., 2014). Job generation by SMEs is a subject of interest to many parties, not least state and local policymakers (Henrekson and Johansson, 2010; Yazdanfar, 2011). Unsurprisingly, policymakers are keen to increase the number of start-ups (Ayyagari et al., 2011). However, Lundström and Kremel (2009) demonstrated very high failure rates among SMEs in the first life-cycle stages. This suggests a need to consider not only the number of start-ups but also the effects of firm growth on employment rates. Since the seminal work of Birch (1981), many investigations have treated small businesses as the main source of job creation at the macroeconomic level (Fu and Balasubramanyam, 2005; Kapsos, 2005; Haltiwanger et al., 2013; Decker et al., 2014; Aga et al., 2015). As these empirical studies have paid little attention to the firm-level job generation factors that explain the influence of firm growth on employment level, the current study examines the role of firm-level growth in the generation of employment. The extent to which different types of SMEs create jobs seems to vary between countries and socio-economic contexts (Ayyagari et al., 2011), justifying the specific focus of this study on Swedish SMEs. In Sweden, SMEs are estimated to account for more than 99 per cent of registered firms (Tillväxtverket, 2017). According to a report from Sweden’s largest entrepreneurial organization (Förtagarna, 2013), SMEs have created more than four out of five new jobs in Sweden since 1990. Moreover, most Swedish SMEs are active in the service sector, which accounts for most economic activity in the Swedish economy, in contrast to the past when manufacturing was the largest economic sector. The current study empirically investigates the association between firm growth and job creation among SMEs in Sweden. The study uses a comprehensive database of 13,548 SMEs operating in four industries over the 2009-2012 period. It contributes to the literature on the relationship between firm-level factors and job creation, suggesting that it is primarily fastgrowing SMEs with high chances of survival that create jobs. The article proceeds as follows: Section 2 presents the theoretical framework and previous empirical studies used to develop the hypotheses. Section 3 outlines the selection of variables, the hypotheses, the data sample and model specification. Section 4 reports the empirical results and the diagnostic validation tests. The final section concludes the article.