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Did US Business Dynamism Recover in the 2010s?

Asier Aguilera-Bravo, Miguel Casares () and Hashmat Khan ()

No 21-03, Carleton Economic Papers from Carleton University, Department of Economics

Abstract: We provide evidence showing that the US business entry rates have been either rising or remained flat over the past decade ending their secular decline observed over previous decades. Although the number of startups relative to incumbents has been increasing, their job-size (intensive margin) has decreased substantially. Controlling for these opposite trends reveals that the size-adjusted entry rates have remained flat after 2010 at historically minimum values. The vigorous business dynamism reflected in actual entry rates, therefore, masks the weakness of employment creation in new businesses. The average number of hirings per new establishment has fallen from around 6 jobs in the 1990s to nearly 3 jobs in recent observations.

Keywords: Business entry rates; Business dynamism; Size-adjusted entry rates; BED; BDS (search for similar items in EconPapers)
JEL-codes: E22 E32 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2021-04-26
New Economics Papers: this item is included in nep-bec, nep-ent, nep-mac and nep-sbm
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Published: Carleton Economics Papers

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