Entrepreneurship over the Business Cycle in the United States: A Decomposition

Arbeitspapier

Entry rates into self-employment increase during recessions and decrease during economic upswings. I show that this is mostly explained by the higher unemployment rate during a recession, together with the fact that at all times, unemployed persons have a relatively high propensity to become entrepreneurs out of necessity because they do not find paid employment. I use econometric decomposition techniques to quantify these effects based on the monthly matched US Current Population Survey before, during and after the Great Recession. I also document that this counter-cyclical pattern of entrepreneurial entry strongly applies to unincorporated entrepreneurship, but only weakly to incorporated entrepreneurship. This highlights the association of unincorporated and incorporated entrepreneurship with necessity and opportunity entrepreneurship, respectively. The results are useful for policy-makers and practitioners to understand, forecast and act on the different types of entrepreneurial activities that are to be expected over the business cycle.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 12499

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Entrepreneurship ; Time Allocation and Labor Supply ; Labor Demand ; New Firms; Startups
• Thema: entrepreneurship ; business cycle ; Great Recession ; unemployment ; opportunity ; necessity ; decomposition

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Fossen, Frank M.
• Ereignis: Veröffentlichung
• (wer): Institute of Labor Economics (IZA)
• (wo): Bonn
• (wann): 2019

Weitere Informationen

• Handle: http://hdl.handle.net/10419/207325
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ