Declining Entrepreneurship, Labor Mobility, and Business Dynamism: A Demand-Side Approach

Source: Mike Konczal and Marshall Steinbaum, Roosevelt Institute, July 21, 2016

From the blog post:
We—Marshall Steinbaum, who has recently joined the Roosevelt Institute as a visiting fellow, and Mike Konczal—have a new working paper out titled Declining Entrepreneurship, Labor Mobility, and Business Dynamism: A Demand-side Approach. …. This paper provides an alternative explanation for the recent trends of declining entrepreneurship, falling labor mobility, and rising concentration of employment in old firms and large firms. Our explanation focuses on weakening demand, especially during the slow recovery from the last two recessions. That demand slowdown should, in turn, be investigated further, keeping in mind both secular stagnation and how power is shifting in favor of the owners and managers of incumbent firms alongside rising profits and inter-firm inequality.

The key findings in this report are:
• Wages Are Falling the Most Where Dynamism Has Fallen the Most. …..
• Those Who Do Switch Jobs Have Flat, or Even Declining, Wage Increases. …..
• Dynamism and Fluidity Are Procyclical. …..