Full Citation

Title: Demographic Origins of the Startup Deficit

Citation Type: Working Paper

Publication Year: 2019

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ISSN:

DOI: 10.3386/w25874

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Abstract: We propose a simple explanation for the long-run decline in the startup rate. It was caused by a slowdown in labor supply growth since the late 1970s, largely pre-determined by demographics. This channel explains roughly two-thirds of the decline and why incumbent firm survival and average growth over the lifecycle have been little changed. We show these results in a standard model of firm dynamics and test the mechanism using shocks to labor supply growth across states. Finally, we show that a longer startup rate series imputed using historical establishment tabulations rises over the 1960-70s period of accelerating labor force growth.

Url: http://www.nber.org/papers/w25874.pdf

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Authors: Karahan, Fatih; Pugsley, Benjamin; Şahin, Ayşegül

Series Title: NBER Working Paper Series

Publication Number: 25874

Institution: National Bureau of Economic Research

Pages:

Publisher Location: Cambridge, MA

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure, Population Mobility and Spatial Demography

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