We examine quarterly microlevel data on labor market transitions taken from the Current Population Survey from 1990 to 2014 to estimate how the business cycle affects transitions into and out of self-employment from other labor market states.
New business establishments can be created by entrepreneurs opening new firms or by existing businesses opening new locations. We show that over the past 3 decades, new establishments have increasingly been provided by existing.
Since the Great Recession, bank lending to small businesses has fallen significantly, and policymakers have become concerned that these businesses are not getting the credit they need.
Is uncertainty causing small business owners to behave in ways that are hindering the recovery? That question is at the center of an intense public debate.
Though the recent recession was the worst downturn since the Great Depression, some observers argue that one silver lining is an upswing in entrepreneurship.
