Is American Entrepreneurship in Crisis?
An NBER Conference Explores the Issue
Entrepreneurship is an important contributor to productivity growth in the American economy, and there is currently concern that American entrepreneurship is in serious decline. Participants in an NBER conference this autumn, convened with the support of the Ewing Marion Kauffman Foundation explored the measurement of entrepreneurial activity and the factors that affect it. They found that while the number of new firms has declined in recent years, the growth potential of the firms that are started has not; it actually has risen since 2010. Researchers also reported that labor productivity grows more rapidly at young firms than at their more established counterparts, and investigated how a number of public policies, such as state corporate income taxes and minimum wages, affect the rate of start-up activity.
The amount of earnings retained within businesses in Norway increased sharply after a reform of the personal income tax in 2005, Annette Alstadsæter, Martin Jacob, Wojciech Kopczuk, and Kjetil Telle find. This change in firm behavior led to a doubling, in some years, of the reported income of the top 0.1 percent of earners.
Destruction of long-term lending relationships associated with bank failures explains one-eighth of the economic contraction during the Great Depression, according to research by Jon Cohen, Kinda Cheryl Hachem, and Gary Richardson. The effect through only small banks explains one-third of the contraction.
Cross-region variation provides macroeconomic researchers with richer information on economic fluctuations than aggregate time series data at the national level, writes University of Chicago Professor Erik Hurst, who explains the utility and complications of this approach in the latest edition of The NBER Reporter. Also featured in this issue of the quarterly Reporter are articles by NBER researchers on the dynamics of the U.S. market in higher education, the effects of the business cycle on health behaviors, the development of Chinas trade policies, and the impacts of globalization on foreign investment and business structures.
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Reductions in childhood blood lead levels in Rhode Island had positive effects on third grade reading scores, according to a study summarized in the new edition of The NBER Bulletin on Aging and Health. This months issue also features research examining how long-term care hospitals discharge patients strategically and how raising the early retirement age impacts retirement decisions in Austria.
Mutual fund managers from poor families consistently achieve better investment results than fund managers from wealthier backgrounds, according to research summarized in the December NBER Digest. The researchers also find significant differences in promotion patterns and trading styles between these two types of fund manager. Also featured in the December edition of the Digest: a report on the impacts of the Federal Reserve's quantitative easing programs, a survey of what venture capitalists look for in a deal, a study of how politics in London helped bring on the Revolutionary War, an examination of what people value — and don't value — in their work schedules, and an analysis of the composition of the alternative workforce.
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A new NBER book by Leah Platt Bouston. From Princeton University Press, 2016 $29.95 (cloth)
From 1940 to 1970, nearly four million black people migrated from the American rural South to settle in the industrial cities of the North and West. Competition in the Promised Land provides a comprehensive account of the long-lasting effects of the influx of black workers on labor markets and urban space in receiving areas.
Traditionally, the Great Black Migration has been lauded as a path to general black economic progress. Leah Boustan challenges this view, arguing instead that the migration produced winners and losers within the black community. Boustan shows that migrants themselves gained tremendously, more than doubling their earnings by moving North. But these new arrivals competed with existing black workers, limiting black-white wage convergence in Northern labor markets and slowing black economic growth. Furthermore, many white households responded to the black migration by relocating to the suburbs. White flight was motivated not only by neighborhood racial change but also by the desire on the part of white residents to avoid participating in the local public services and fiscal obligations of increasingly diverse cities.
Employing historical census data and state-of-the-art econometric methods, Competition in the Promised Land revises our understanding of the Great Black Migration and its role in the transformation of American society.
To order, contact Perseus Distribution, phone 1-800-343-4499; fax 1-800-351-5073, or email orderentry@perseusbooks.com.
Entrepreneurship is an important contributor to productivity growth in the American economy, and there is currently concern that American entrepreneurship is in serious decline. Participants in an NBER conference this autumn, convened with the support of the 
