IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/14671.html
   My bibliography  Save this paper

Startups and Employment Following the COVID-19 Pandemic: A Calculator

Author

Listed:
  • Sterk, Vincent
  • SedlÃ¡Ä ek, Petr

Abstract

Early indicators suggest that startup activity is heavily disrupted by the COVID-19 pandemic and the associated lockdown. At the same time, empirical evidence has shown that such disturbances may have long-lasting effects on aggregate employment. This paper presents a calculator which can be used to compute these effects under different scenarios regarding (i) the number of startups, (ii) the growth potential of startups, and (iii) the survival rate of young firms. We find that employment losses can be substantial and last for more than a decade, even when the assumed slump in startup activity is only short-lived.

Suggested Citation

  • Sterk, Vincent & SedlÃ¡Ä ek, Petr, 2020. "Startups and Employment Following the COVID-19 Pandemic: A Calculator," CEPR Discussion Papers 14671, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14671
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP14671
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. François Gourio & Todd Messer & Michael Siemer, 2016. "Firm Entry and Macroeconomic Dynamics: A State-Level Analysis," American Economic Review, American Economic Association, vol. 106(5), pages 214-218, May.
    2. Lichter, Andreas & Peichl, Andreas & Siegloch, Sebastian, 2015. "The own-wage elasticity of labor demand: A meta-regression analysis," European Economic Review, Elsevier, vol. 80(C), pages 94-119.
    3. John Haltiwanger & Ron S. Jarmin & Robert Kulick & Javier Miranda, 2016. "High Growth Young Firms: Contribution to Job, Output, and Productivity Growth," NBER Chapters, in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges, pages 11-62, National Bureau of Economic Research, Inc.
    4. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
    5. Lucia Foster & John C. Haltiwanger & C. J. Krizan, 2001. "Aggregate Productivity Growth: Lessons from Microeconomic Evidence," NBER Chapters, in: New Developments in Productivity Analysis, pages 303-372, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Samet Gunay & Walid Bakry & Somar Al-Mohamad, 2021. "The Australian Stock Market’s Reaction to the First Wave of the COVID-19 Pandemic and Black Summer Bushfires: A Sectoral Analysis," JRFM, MDPI, vol. 14(4), pages 1-19, April.
    2. Suphanit Piyapromdee & Peter Spittal, 2020. "The Income and Consumption Effects of COVID‐19 and the Role of Public Policy," Fiscal Studies, John Wiley & Sons, vol. 41(4), pages 805-827, December.
    3. Thomas Gries & Wim Naudé, 2021. "Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures," Economics of Disasters and Climate Change, Springer, vol. 5(3), pages 329-353, October.
    4. Christoph Albert & Andrea Caggese & Beatriz González, 2020. "The short- and long-run employment impact of Covid-19 through the effects of real and financial shocks on new firms," Economics Working Papers 1739, Department of Economics and Business, Universitat Pompeu Fabra.
    5. Camino-Mogro, Segundo, 2020. "Turbulence in startups: Effect of COVID-19 lockdown on creation of new firms and its capital," MPRA Paper 104502, University Library of Munich, Germany.
    6. Naudé, Wim, 2020. "Entrepreneurial Recovery from COVID-19: Decentralization, Democratization, Demand, Distribution, and Demography," GLO Discussion Paper Series 631, Global Labor Organization (GLO).
    7. Markus Brueckner & Joaquin Vespignani, 2021. "COVID‐19 Infections and the Performance of the Stock Market: An Empirical Analysis for Australia," Economic Papers, The Economic Society of Australia, vol. 40(3), pages 173-193, September.
    8. Anna Cororaton & Samuel Rosen, 2021. "Public Firm Borrowers of the U.S. Paycheck Protection Program [The risk of being a fallen angel and the corporate dash for cash in the midst of COVID]," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 10(4), pages 641-693.
    9. Morten Bennedsen & Berthe Larsen & Ian M. Schmutte & Daniela Scur, 2020. "Preserving job matches during the Covid-19 pandemic: firm-level evidence on the role of government aid," CEP Occasional Papers 51, Centre for Economic Performance, LSE.
    10. Shyngys Karimov & Jozef Konings, 2021. "How lockdown causes a missing generation of start-ups and jobs," International Economics and Economic Policy, Springer, vol. 18(3), pages 457-473, July.
    11. Mina, Andrea & Santoleri, Pietro, 2021. "The effect of the Great Recession on the employment growth of young vs. small firms in the Eurozone," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 184-194.
    12. Enesiti Chirume, 2021. "The Effects of Covid-19 on the Financial Sector and the Role of Social Media as an Advertising Tool in these Trying Times in Zimbabwe," Journal of Economics and Behavioral Studies, AMH International, vol. 13(2), pages 8-15.
    13. Naudé, Wim, 2020. "Industrialization under Medieval Conditions? Global Development after COVID-19," GLO Discussion Paper Series 704, Global Labor Organization (GLO).
    14. Carsten Bergenholtz & Kim Klyver & Oana Vuculescu, 2023. "Self-Efficacy in Disrupted Environments: COVID-19 as a Natural Experiment," Entrepreneurship Theory and Practice, , vol. 47(3), pages 724-750, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alon, Titan & Berger, David & Dent, Robert & Pugsley, Benjamin, 2018. "Older and slower: The startup deficit’s lasting effects on aggregate productivity growth," Journal of Monetary Economics, Elsevier, vol. 93(C), pages 68-85.
    2. Mika Maliranta & Satu Nurmi, 2019. "Business owners, employees, and firm performance," Small Business Economics, Springer, vol. 52(1), pages 111-129, January.
    3. Marcin Bielecki, 2022. "Long Shadows of Financial Shocks: An Endogenous Growth Perspective," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-23.
    4. Michel Dumont & Chantal Kegels, 2016. "Working Paper 06-16 - Young Firms and Industry Dynamics in Belgium," Working Papers 1606, Federal Planning Bureau, Belgium.
    5. Peter Bauer & Igor Fedotenkov & Aurelien Genty & Issam Hallak & Peter Harasztosi & David Martinez Turegano & David Nguyen & Nadir Preziosi & Ana Rincon-Aznar & Miguel Sanchez Martinez, 2020. "Productivity in Europe: Trends and drivers in a service-based economy," JRC Research Reports JRC119785, Joint Research Centre.
    6. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2018. "Who creates jobs and who creates productivity? Small versus large versus young versus old," Economics Letters, Elsevier, vol. 164(C), pages 50-57.
    7. Camino-Mogro, Segundo, 2020. "Turbulence in startups: Effect of COVID-19 lockdown on creation of new firms and its capital," MPRA Paper 104502, University Library of Munich, Germany.
    8. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2016. "Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector," American Economic Review, American Economic Association, vol. 106(8), pages 2110-2144, August.
    9. Flora Bellone & Patrick Musso & Lionel Nesta & Frédéric Warzynski, 2009. "L'effet pro-concurrentiel de l'intégration européenne. Une analyse de l'évolution des taux de marge dans les industries manufacturières françaises," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 139-163.
    10. Kox, Henk L.M. & Leeuwen, George van & Wiel, Henry van der, 2010. "Competitive, but too small - productivity and entry-exit determinants in European business services," MPRA Paper 24389, University Library of Munich, Germany.
    11. Ahn, JaeBin & Choi, Moon Jung, 2020. "From firm-level imports to aggregate productivity: Evidence from Korean manufacturing firm data," Japan and the World Economy, Elsevier, vol. 56(C).
    12. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 660-694, December.
    13. Bockerman, Petri & Maliranta, Mika, 2007. "The micro-level dynamics of regional productivity growth: The source of divergence in Finland," Regional Science and Urban Economics, Elsevier, vol. 37(2), pages 165-182, March.
    14. Aghion, Philippe & Akcigit, Ufuk & Howitt, Peter, 2014. "What Do We Learn From Schumpeterian Growth Theory?," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 0, pages 515-563, Elsevier.
    15. Mahmut Yasar & Roderick M. Rejesus & Ilhami Mintemur, 2006. "Plant-level dynamics and aggregate productivity growth in the Turkish meat-processing industry: Evidence from longitudinal data," Agribusiness, John Wiley & Sons, Ltd., vol. 22(1), pages 91-107.
    16. Antonio Navas & Davide Sala, 2015. "Innovation and Trade Policy Coordination: The Role of Firm Heterogeneity," The World Economy, Wiley Blackwell, vol. 38(8), pages 1205-1224, August.
    17. Sónia Félix & Sudipto Karmakar, 2021. "Serial Entrepreneurs, the Macroeconomy and Top Income Inequality," Working Papers w202113, Banco de Portugal, Economics and Research Department.
    18. Acemoglu, Daron & Cao, Dan, 2015. "Innovation by entrants and incumbents," Journal of Economic Theory, Elsevier, vol. 157(C), pages 255-294.
    19. de Backer, Koen & Sleuwaegen, Leo, 2003. "Foreign ownership and productivity dynamics," Economics Letters, Elsevier, vol. 79(2), pages 177-183, May.
    20. Jose Asturias & Sewon Hur & Timothy J. Kehoe & Kim J. Ruhl, 2023. "Firm Entry and Exit and Aggregate Growth," American Economic Journal: Macroeconomics, American Economic Association, vol. 15(1), pages 48-105, January.

    More about this item

    Keywords

    Startups; Macroeconomics; Employment; Covid-19;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • I10 - Health, Education, and Welfare - - Health - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:14671. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.