Demographic Origins of the Startup Deficit

Fatih Karahan, Benjamin Pugsley and Aysegul Sahin

No 25874, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D22 E24 J11 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-his, nep-lab and nep-mac
Note: EFG ME
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Citations: View citations in EconPapers (37)

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Journal Article: Demographic Origins of the Start-up Deficit (2024)
Working Paper: Demographic Origins of the Startup Deficit (2019)
Working Paper: Demographic origins of the startup deficit (2019)
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