Demographic origins of the startup deficit

Arbeitspapier

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 a longer startup rate series, imputed using historical establishment tabulations, that rises over the 1960-70s period of accelerating labor force growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Staff Report ; No. 888

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Empirical Analysis ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Demographic Trends, Macroeconomic Effects, and Forecasts
• Subject: firm dynamics ; demographics ; business dynamism ; macroeconomics

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Karahan, Fatih ; Pugsley, Benjamin ; Şahin, Ayşegül
• Event: Veröffentlichung
• (who): Federal Reserve Bank of New York
• (where): New York, NY
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/210740
• Last update: 10.03.2025, 11:41 AM CET