EconPapers    
Economics at your fingertips  
 

The Role of Corporate Taxes in the Decline of the Startup Rate

Julian Neira and Rish Singhania

MPRA Paper from University Library of Munich, Germany

Abstract: The business startup rate in the United States has exhibited a large secular decline in recent decades. The reasons behind the decline are not well understood. This paper hypothesizes that the startup rate declined in large part because corporate taxes raised the opportunity cost of entrepreneurship. We formalize this thesis using a model of occupational choice that features firm entry and exit. Quantitatively, the model accounts for much of the decline in the startup rate. Taxes alone account for one-fifth of the decline. Cross-sectoral patterns in US data support our results.

Keywords: Firm Entry; Startups; Corporate Taxes; Declining Business Dynamism; Occupational Choice (search for similar items in EconPapers)
JEL-codes: D2 E2 E6 H2 (search for similar items in EconPapers)
Date: 2017-09-26
New Economics Papers: this item is included in nep-acc, nep-cta, nep-ent, nep-mac, nep-pbe, nep-pub and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/81662/1/MPRA_paper_81662.pdf original version (application/pdf)

Related works:
Journal Article: The role of corporate taxes in the decline of the startup rate (2022) Downloads
Working Paper: The Role of Corporate Taxes in the Decline of the Startup Rate (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:81662

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2025-03-30
Handle: RePEc:pra:mprapa:81662