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

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About the presenter's visit

Dr Fatih Karahan will be visiting the School of Economics on Wednesday 23rd October 2019.  While here he will be using room 520A Colin Clark Building.  If you would like to meet with him or have lunch or dinner with him please contact Dr Satoshi Tanaka who will be his host while at The University of Queensland.  Dr Tanaka can be contacted on s.tanaka@uq.edu.au.

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Venue

Level 6, Colin Clark building
The University of Queensland
St Lucia campus
Room: 
629