Demographic Origins of the Startup Deficit / Fatih Karahan, Benjamin Pugsley, Ayşegül Şahin.

Format:

Book

Author/Creator:

Karahan, Fatih.

Contributor:

National Bureau of Economic Research.

Pugsley, Benjamin.

Şahin, Ayşegül.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25874.

NBER working paper series no. w25874

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2019.

Summary:

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.

Notes:

Print version record

May 2019.