Starting Smaller; Staying Smaller: America's Slow Leak in Job Creation

E. J. Reedy, Robert E. Litan
2011 Social Science Research Network  
K a u f f m a n F o u n d a t i o n R e s e a r c h S e r i e s : F i r m F o r m a t i o n a n d E c o n o m i c G r o w t h 2 A b s t r a c t Abstract Although understandable in light of its traumatic impact, the Great Recession of 2007-2009 may be distracting attention from a more fundamental troubling economic trend. The United States appears to be suffering from a long-term leak in job creation that pre-dates the recession and has the potential to persist for an unknown time. The heart of
more » ... he problem is a pullback by newly created businesses, the economy's most critical source of job creation, which are generating substantially fewer jobs than one would expect based on past experience. was the highest year on record in the United States for the Kauffman Index) was being driven by entry of businesses likely to provide less employment over time. 2 This essay looks more deeply at new "employer businesses," the subset of startup companies that create jobs other than those of the owner.
doi:10.2139/ssrn.1883660 fatcat:27tgkk2nkbafnisjrya7yxopgu